Excavator export slump, China’s domestic sales continue to climb

Affected by the overseas epidemic, China’s domestic excavator export market is sluggish. Shanghai Securities released a research report on June 1st, lowering the expected growth rate of domestic excavator exports from 40% to 15% in 2020. 

In recent years, domestic construction machinery companies have expanded rapidly overseas. Since 2017, the year-on-year growth rate of domestic export sales of excavators has been maintained at more than 30%, and even reached 97.5% in 2018. In 2019, this growth rate was 39.4%. 

The head of international marketing of Sunward Intelligent (002097.SZ) told Caixin that the export volume of domestic excavators rose slightly in the first four months of 2020, but it was far below the expectations of most companies. 

Statistics from the China Construction Machinery Industry Association show that in April 2020, the 25 excavator manufacturers included in the statistics exported a total of 2,055 excavators of various types, an increase of 0.88% year-on-year. 

Domestic construction machinery companies originally had high expectations for the international market of excavators. “We had expected the growth rate of the overseas market to be 50%, but on the basis of the current data, the sales data in the overseas market is almost the same as last year.” The above-mentioned head of international marketing told Caixin reporters. 

The domestic excavator export market is mainly concentrated in Europe, India and Southeast Asia. In order to adapt to business needs, construction machinery companies usually set up sales-oriented branches abroad. Sun River Intelligent established Sun River Europe Heavy Industry Company in Belgium in 2015; domestic construction machinery giant Sany Heavy Industry (600031.SH) has set up branches in Indonesia, the United States, Europe, Latin America and other regions. These branches have become the front lines of overseas sales of domestic construction machinery. 

The epidemic has restricted the flow of people and logistics between countries, international flights have been grounded in large areas, international trade has been physically cut off, and the movement of enterprises and business negotiations have been hindered. The higher the degree of localization of the company’s overseas branches, the less affected by the epidemic, and many businesses can be directly completed locally. “We entered the European market earlier, and the local sales of micro-digging in the first four months of this year still maintained a growth rate of 40%.” The above-mentioned Shanhe Intelligent Marketing person in charge told Caixin reporters. 

In 2012, Sany Heavy Industry acquired Germany Putzmeister Holding Co., Ltd., and Europe has become a region with a high degree of localization. “Currently, our sales in the European market are not bad.” Sany told Caixin reporters. However, Sany’s overseas markets are all over the world. The company said in its 2019 annual report that due to the epidemic, there will be some uncertainty in the company’s overseas market in 2020. 

The overseas market is cold, but benefited from domestic infrastructure speed-up and construction period compression, domestic excavator sales continue to rise. Statistics from the China Construction Machinery Industry Association show that the 25 excavator manufacturers included in the statistics in April 2020 sold a total of 43,371 excavators in China, a year-on-year increase of 64.5%.

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