The market continues to grow.
Statistics from the Excavation Machinery Branch of the China Construction Machinery Industry Association show that in January-February 2020, China's domestic sales of excavators fell 46.5% year-on-year; however, the market quickly stopped falling in March, and sales in March increased 11.2% year-on-year. Monthly continuous high growth, the year-on-year growth in April and May reached 64.5% and 76.3% respectively, and the year-on-year growth in January-May reached 19.3%.
"It is expected that in the first half of 2020, China's domestic sales of excavators will hit a record high." Huang Min, chairman of the China Construction Machinery Industry Association Excavation Machinery Branch, made such a judgment.
Overseas plunge & China's exports now worries
The global market outside of China is not too good.
"Affected by the epidemic situation, plus the European, American and Japanese construction machinery industries have entered the industrial cycle decline range, the global excavator demand except China from January to April 2020, fell by 13.4%. In addition, the current situation of overseas epidemic situation is still uncertain, 2020 The global excavator market is likely to decline sharply in 2016. Even after the epidemic is contained, due to the limited growth momentum and space for infrastructure investment overseas, especially in developed regions, the market is unlikely to experience a retaliatory rise." Huang Min said.
Affected by the bleak global market, the fast-growing export market has also shown signs of slowing down in the past two years. In 2019, China's export of excavators increased by 39% year-on-year, and in January and February 2020, the market maintained a rapid growth attitude, with year-on-year increases of 35.3% and 62.5%, respectively. However, with the outbreak of the global epidemic in March, the export market growth rate continued to decline. The year-on-year increase in March fell to 17.7%, and the year-on-year increase in April and May fell to 0.9% and 3.3%. The cumulative export sales growth rate from January to May also fell to 20.7%.
Data show that from January to April 2020, the export of Chinese brand excavators increased by 17.7% year-on-year, of which exports in mature markets in Europe and America increased by 26% year-on-year, and exports in emerging markets increased by 21% year-on-year. "Overall, it is expected that China's export sales of excavators in 2020 are likely to be the same as 2019." Huang Min predicted.
Global change
The polarization in the development of the Chinese and foreign excavator markets is bringing about major changes in the global excavator industry.
In fact, changes have long been traced.
First of all, in the world's largest excavator market-China, the division of "cake" has changed. Over the past 10 years, Chinese excavator companies have relied on 3-4 generation product upgrades and technology-related accumulation to increase their market share from less than 30% in 2010 to about 70% today. Conversely, foreign brands that have dominated the Chinese excavator market for a long time, apart from Caterpillar, Komatsu, Hitachi, Doosan, Volvo, Hyundai, etc., still have considerable shares, other companies have already declined in China. It is increasingly certain that in the Chinese excavator market, a new camp represented by local companies is taking shape.
Outside of China, shrinking global market demand, especially in Europe, America and Japan, has also brought considerable pressure on foreign brands. Beginning in the fourth quarter of 2019, the performance of European, American and Japanese construction machinery manufacturers has declined significantly. In the first quarter of 2020, according to public information, the epidemic intensified this trend-Caterpillar, the world's largest construction machinery manufacturer, construction machinery business fell 21% year-on-year, and mining machinery business fell 24% year-on-year.
Changes in the scale of China and multinational excavator manufacturers have caused another round of shuffling in the global ranking of the excavator industry. The new industry pattern is accelerating.
Chinese market, scale wins
The Chinese excavator market believes in technology and products, but more in scale; after all, in the entire construction machinery industry, the excavator itself is a scale-oriented segment, and only the advantages of products, technology and other aspects can be converted into real ones. Only scale can in turn promote further technological iteration, product upgrades and cost control of the enterprise, so that the development of the enterprise enters a virtuous circle. Without scale, it is impossible to grow bigger and more impossible to grow stronger.
Looking back at the development of China's excavator industry in the past decade, only those companies that have formed a moat of scale and are strenuous in terms of products, technology and other indicators have successfully reached today and still maintain the lead; otherwise, they only have products Advantages, brand advantages, and companies with no real share in the circle can hardly be said to be the final harvest of the Chinese excavator market. "As the competition is further fierce, the market concentration of the Chinese excavator industry will be higher in the future, and the oligarch effect will be more prominent." Huang Min is convinced of this.
Under the influence of the global epidemic industry cycle, in your opinion, what will happen to the Chinese excavator market in 2020? Is it possible for the market to reach a new high in the first half of 2020?
Huang Min: With the gradual control of the domestic epidemic situation, the demand for the construction machinery industry represented by excavators has grown rapidly. From January to May, domestic excavator sales increased by 19.3% year-on-year. The 2020 government work report pointed out that overall planning to promote epidemic prevention and control and economic and social development work, adhere to the overall tone of steady progress, firmly implement the strategy of expanding domestic demand, the current macro-control policies continue to force, industrial resumption of production accelerated, the main economic indicators The decline has narrowed to varying degrees, among which investment has rebounded relatively quickly, and the recovery of investment in real estate and infrastructure has strongly promoted the growth of the excavator industry. It is expected that in the first half of 2020, China's domestic market for excavators will hit another record high.
Throughout 2020, how do you think the global excavator market will develop outside of China? Especially in the European, North American, and Japanese markets, in the second half of 2020, with the gradual control of the epidemic, is it possible that these markets will witness a retaliatory rise?
Huang Min: Under the double blow of the expansion of the epidemic situation and the wide range of stock market shocks, the growth momentum of overseas major economies has dropped significantly. Except for China and low-income developing countries, whose economies have maintained low growth, the global economies have basically fallen into recession. Affected by the epidemic, the demand for the overseas excavator industry fell sharply by 13.4% from January to April 2020. Overseas OEMs and downstream industries have experienced shutdowns and production cuts. The current epidemic situation in overseas is still uncertain. In 2020, the global excavator market is expected to decline significantly. Europe, North America and Japan are the hardest hit areas, and the industry decline will be more severe. With the impact of the global epidemic on the supply chain, it will cause changes in the excavator brand structure. The excavator industry in 2020 will be more fierce and brutal. Sales scale is the core of the competition. In the second half of 2020, even though the epidemic will be gradually controlled, there is limited growth momentum for overseas infrastructure investment, and there is no expectation of a retaliatory rise in overseas markets.
What impact will fluctuations in foreign markets have on China's export of excavator products in 2020? What do you think will be the scale and level of China's export sales of excavators in 2020?
Huang Min: On the one hand, the spread of the epidemic in countries such as Europe and the United States has caused the global economy to basically fall into recession, maritime logistics, personnel movement, and business communication have been hindered, and the market demand for overseas mining machinery has also declined. But on the other hand, overseas construction machinery manufacturing companies have seriously affected their production due to the epidemic, which has led to an increase in China's export demand for excavators. From January to April this year, the cumulative export of Chinese brand excavators increased by 17.7% year-on-year, of which mature markets rose 26% and emerging markets increased 21% year-on-year. The current situation of overseas epidemic situation is still unclear, and it is expected that China's export sales of excavators will be the same as the previous year in 2020.
Chinese excavator manufacturers have grown rapidly in recent years, and Chinese excavator products and technologies are rapidly and continuously improving. In your opinion, at present, China's excavator products and China's excavator manufacturing level, in the process of benchmarking with foreign leading benchmarks, what other aspects do we need to strengthen?
Huang Min: We still need to strengthen a lot, such as facing customer needs and technological frontiers, promoting global development of R&D capabilities, and quickly launching products that meet customer needs; rebuilding the global supply chain and manufacturing system to create technological and cost advantages; The improvement of spare parts and service capabilities has continuously achieved higher customer satisfaction.
In the next 3-5 years, what new trends and trends will emerge in the competition of China's excavator industry?
Huang Min: The market showed a cyclical surge to stabilize. Infrastructure investment drives steady economic growth, and key projects accelerate investment implementation; environmental protection and emission requirements are upgraded to help accelerate the upgrading and elimination of old equipment.
Industry competition has intensified and a new round of shuffling has entered. The price war of excavators led to a new round of comprehensive price competition in the industry; the industry is more concentrated and the oligarch effect is prominent; the new round of industry reshuffle speeds up and the weak brands accelerate their elimination.
Intelligent and digital transformation. With the application of the Internet of Things, big data and artificial intelligence, the industry's intelligent and digital transformation is accelerating; product manufacturing is becoming intelligent, and marketing services are being transformed into digital.
