EXCAVATOR DOMESTIC SALES FOR THREE CONSECUTIVE MONTHS TO ACHIEVE POSITIVE GROWTH OF CONSTRUCTION MACHINERY RECOVERY TRILOGY

■ Huo Yue, China Industry News reporter

The demand for construction machinery industry is getting stronger.

As a weathervane of the construction machinery industry and an economic barometer, excavators are widely used in infrastructure construction such as water conservancy, power and roads, as well as real estate development, mining and other fields, and its sales data can best reflect the changes in demand and the direction of the industry.

According to the data released by the China Construction Machinery Industry Association recently, according to the statistics of the major manufacturers of excavators, in May 2024, the domestic sales of various types of excavators were 8518, an increase of 29.2%.

From a long-lost year-on-year growth of 9.27% in March, to a year-on-year growth of 13.3% in April, and then to a growth of nearly 30% in May, the domestic sales of excavators, which were forced by the downward cycle of the construction machinery industry, have changed the trend of negative growth for several months, and have achieved positive year-on-year growth for three consecutive months.

It can be predicted that with the promotion of equipment to replace the old and new and the introduction of real estate favorable policies, the equipment renewal cycle is started, domestic demand continues to improve, and the export market share is increased, and the recovery trilogy of China's construction machinery industry has been played.

Sales data gradually improved towards good domestic demand

The arrival of the traditional sales season, so that the construction machinery industry prosperity continued to repair. In May, domestic sales of excavators and loaders both achieved double-digit growth of 29.2% and 14.3%.

Specifically, the China Construction Machinery Industry Association released in May the main product sales express shows that in May sales of all kinds of excavators 17,824 units, an increase of 6.04%, of which domestic 8518 units, an increase of 29.2%; Exports were 9,306 units, down 8.92% year-on-year.

From January to May, the industry sold a total of 86,610 excavators, down 6.92% year-on-year; Among them, 45,746 domestic units, an increase of 1.81%; Exports were 40,864 units, down 15.1% year-on-year.

According to the statistics of the major manufacturers of loaders of the Association, 9,824 units of various types of loaders were sold in May, an increase of 8.36%. Among them, 5,172 units were sold in the domestic market, an increase of 14.3%; The export sales volume was 4,652 units, up 2.4% year-on-year.

From January to May, a total of 46,224 types of loaders were sold, down 3.78% year-on-year. Among them, 23,617 units were sold in the domestic market, down 7.72% year-on-year; Export sales were 22,607 units, up 0.7% year-on-year.

At the same time, the electrification transformation of China's construction machinery accelerated, and 1250 electric loaders were sold in May, an increase of 310 compared with the previous month, and the penetration rate of electric loaders reached 13%.

The reporter noted that since the beginning of this year, the cumulative growth rate of domestic excavator sales has turned positive, from January to May, the cumulative domestic sales exceeded export sales, and the excavator market performance in April was also better than expected.

According to the CCTV Financial excavator index, the national construction machinery operating rate was 57.55% in April, and the operating rate of eight provinces and cities such as Anhui, Beijing, Hubei, Hebei, Zhejiang, Hainan, Henan and Sichuan exceeded 70%. In the equipment category, the operating rate of lifting equipment and mining equipment hit a new high in 2024 in April, and mining equipment continued to rise for five consecutive months. The operation rate of lifting equipment is high, indicating that many projects in 2023 have entered the final period; The high operating rate of excavation equipment indicates that the new projects started in 2024 continue to increase.

"Domestic sales data have improved well in recent months, mainly due to structural market conditions, among which small mining performance is better." Qiu Yongning, general manager of Jiangsu Hengli Hydraulic Co., LTD. The downstream application scenarios of small excavators are mainly farmland, water conservancy, construction, etc., while the application scenarios of medium and large excavators are mainly in real estate, infrastructure and other fields.

"To discuss whether the construction machinery industry is recovering, it needs to be measured comprehensively in many aspects. The sales figures of related products are one thing, but the focus is also on the overall sales of the market." A construction machinery manufacturer told reporters that to keep a cool head, the actual landing effect of real estate and other related favorable policies this year needs to be continuously observed.

The update cycle starts to release the warming signal

Since The State Council issued the "Action Plan for Promoting large-scale equipment renewal and replacing old consumer goods with new ones" in March this year, favorable policies have been frequently introduced, and the field of upgrading construction machinery and equipment has attracted much attention. The "Implementation Plan for Promoting the renewal of construction and municipal infrastructure equipment" is a clear requirement to update and eliminate construction construction machinery and equipment that has been used for more than 10 years, has high pollution, high energy consumption, serious aging and wear, and backward technology, including equipment (vehicles) such as digging, lifting, loading, concrete mixing, lifts, bulldozers, etc.

The replacement of old and new construction machinery and equipment is a cycle process of old and new equipment that is inherent in the industry and has always existed. "At present, in China's construction machinery market, this round of large-scale equipment to replace the old and new appears, relying on the relevant national departments and local governments can implement specific policies, including other supporting policies." For example, whether there will be financial compensation for owners of old equipment, and how the related policies will be implemented continuously and thoroughly. Construction machinery industry senior expert Xue Xiaoping believes.

At present, many places in China have made precise efforts to actively layout the construction machinery industry. "Jiangsu Province construction machinery industry high-quality Development action plan" proposed that by 2025, the province's construction machinery industry scale of about 400 billion yuan, of which the host core industry scale of more than 150 billion yuan, become the national construction machinery industry highland, talent highland, scientific and technological innovation highland and intelligent manufacturing highland; By 2030, the province's construction machinery industry development has made major breakthroughs, innovation capacity has been significantly enhanced, lifting machinery, road machinery and other representative products high-end, intelligent, green level of the world's leading, construction machinery industry comprehensive strength reached the international advanced level.

Shandong Province promotes the elimination and renewal of non-road mobile machinery with national I and below emission standards, and strengthens the supervision and publicity guidance of key places such as various construction sites, logistics parks, large industrial and mining enterprises, port terminals, airports, railway freight yards, and machinery leasing points. Actively guide them to send the machinery of national 1 and below emission standards to qualified motor vehicle recycling and dismantling enterprises to complete scrapping and dismantling, and encourage enterprises to add or update forklifts of less than 3 tons to basically realize new energy.

Shanghai issued a public solicitation of opinions on the "Measures for the Management of Funds for Encouraging State II Non-road Mobile Machinery Renewal Subsidies in Shanghai", which clarified the product types, support scope and specific subsidy standards of State II non-road mobile machinery renewal subsidies in Shanghai.

The amount of subsidies for the renewal of non-road mobile machinery is determined according to the type of machinery and other factors, by product, the maximum subsidy for extra-large excavators is 360,000 yuan, the subsidy for large excavators is 138,000 yuan, the subsidy for small and medium-sized excavators is 36,000 yuan, and the subsidy for micro-excavators is 20,000 yuan. The maximum subsidy for large loaders is 234,000 yuan, medium-sized loaders are 156,000 yuan, and small loaders are 110,000 yuan.

It is worth noting that the updated subsidy policy in Shanghai is relatively strong, covering excavators, cranes, bulldozers, loaders, rollers, pavers, graders, forklifts, aerial work vehicles and other machinery categories, the subsidy amount is roughly 10% of the purchase amount, and the maximum subsidy amount of excavators is 360,000 yuan.

In this regard, the relevant person in charge of Sany Heavy Industry Co., Ltd. said that the promotion of large-scale equipment renewal will help accelerate the replacement of old construction machinery, while stimulating the potential demand for equipment renewal, is expected to accelerate the promotion of the replacement of construction machinery and equipment, and has a positive role in promoting the recovery of the entire construction machinery industry.

Exports remain resilient and there is still room for growth

"In the short term, the 'national II' and the following models are approaching the replacement point, focusing on the update progress of construction machinery equipment, 2016 is the bottom of the last round of construction machinery cycle, according to the 8-10 years of the update cycle, 2024 is expected to gradually usher in an inflection point." Donghai Securities believes that in the long run, going to sea is still the trend of The Times. With the steady improvement of the competitiveness of leading products, the continuous improvement of overseas sales channels, after-sales networks, and production bases, it is expected to continue to contribute to incremental contributions.

Data show that the process of China's construction machinery enterprises going to sea is in the outbreak period. Since May 2023, the monthly export sales of excavators have been higher than domestic sales, accounting for more than 50% for 10 consecutive months, and the annual cumulative sales in 2023 are also larger than domestic exports.

Entering 2024, overseas demand is under pressure in stages, with domestic sales exceeding export sales in March and April, but export sales exceeding domestic sales again in May. Although the export of 9306 excavators in May declined year-on-year, the export of high-end and large-tonnage products still maintained an upward trend.

For the future growth of the export market space, "overseas construction machinery market capacity is three times that of the domestic, the current head enterprise overseas market share of about 5%, while overseas leading Caterpillar share of more than 15%, domestic leading still has more than double space." The construction machinery industry report released by Soochow Securities pointed out.

Advancing into the global market is the key for China's construction machinery industry to create a new driving pole and achieve sustainable development. In 2023, Sany Heavy Industry (600031.SH) achieved overseas sales revenue of 43.258 billion yuan, an increase of 18.28%; International income accounted for 60.48% of the main business income, an increase of 14.78 percentage points. Xugong Machinery (000425.SZ) increased the proportion of overseas revenue to about 40% in the same period. Zoomlion's (000157.SZ) overseas revenue accounted for about 38 percent last year, up more than 79.2 percent year on year.

In the Ningxiang Industrial Park of Sany Group, nearly 100 "Big MAC" cranes are neatly arranged, and the red boom stretches to form a spectacular steel corridor. Since this year, Sany restarted Ningxiang Industrial Park has been producing at full capacity. In particular, with the expansion of international market demand, the proportion of overseas products has increased significantly, from 50% last year to 70% this year, and it is showing a trend of continuous increase.

"In the first four months of this year, corporate sales reached 3.2 billion yuan, up 20 percent year-on-year." Li Lei, deputy general manager of Sany overseas marketing, said that the sales performance in Europe and North America was particularly outstanding, with a year-on-year growth of up to 120%.

Recently, Xugong Group delivered a number of products to overseas customers at the 6th International Customer Festival. Among them, the largest all-ground crane with a tonnage of 3,000 tons in the global wind power market was officially delivered to customers in South America.

"As the earliest Chinese construction machinery brand to go abroad, Xugong has always regarded internationalization as one of the main strategies for development." Xugong Group, Xugong Machinery chairman, Party secretary Yang Dongsheng introduced that at the end of last year, the group around overseas regions and market segments, the establishment of the international business headquarters and 14 regions around the world, to promote research, production, supply, marketing services and the whole value chain to go to sea, further enhance the global operation capacity, to provide global customers with "product + scene" integrated solutions and full life cycle services.

"In the first quarter of this year, XCMG machinery overseas revenue accounted for about 44%. Export markets will continue to hold up well, and international revenue will continue to grow well." Yang Dongsheng said that although the domestic construction machinery is in the adjustment period of the trough, the centralized release of one trillion yuan of additional national debt projects, "large-scale equipment update" and other policies, superimposed electrification, new energy and other technology Windows will boost the domestic market recovery. In the long run, the construction machinery industry has a huge space for development, and the industry will shift from the past investment-driven to the connotation of high-quality development, and drive the entire industry to the high-end transformation by value.

Review: Yu Zao

Editor: Zuo Zongxin

Editor: Yang Zi