Where will the domestic construction machinery market go

Release date 2024-11-18 14:42:31 Reading 5

　　used excavator Attempting to question and answer this seemingly simple yet extremely complex question is undoubtedly absurd and arrogant. Recently, while sorting out the development of the structure of China's constructionused excavator machinery industry, the author seems to see a towering tree constantly expanding its roots and branches, hoping for its smooth growth, and attempting to touch the logical framework of this issue.

　　In July 2024, according to statistics from the China Construction Machineryused excavator Industry Association on major manufacturing enterprises, 6234 excavators of various types were sold in the domestic market, a year-on-year increase of 21.95%. This is the fifth month that the domestic excavator market sales data has achieved positive growth this year. In terms of the evolution trend of the market, it is actually just that the data representation is more significant.

The year-on-year decline in the domestic market in the second half of 2023 used excavator has narrowed by 13.54 percentage points compared to the first half, and the market development in 2024 only continues to strengthen this trend.

　　Similar to excavators, in July 2024, the sales data of the domestic loader market also achieved the fourth month of positive growth this year. The year-on-year decline in the domestic market in the second half of 2023 narrowed by 7.23 percentage points compared to the first half, which means that the evolution trend of the loader domestic market is following the excavator, but slightly lagging behind.

　　From another perspective, if you continue to pay attention to the research conducted by the Engineering Machineryused excavator Think Tank today on the subjective market expectations of the domestic agent group mainly composed of excavators, we will find that in July 2023, 98.09% of agents expected the domestic market to decline year-on-year, while in July 2024, this proportion became 61.11%. After one year, nearly 40% of agents have changed from absolute pessimistic expectations to relatively optimistic expectations.

　　used excavator The subjective market sentiment of the agent group does not change overnight, and there have even been significant fluctuations. In February and May 2024, the month on month deterioration was over 6.79 and 7.31 percentage points respectively, while after May, the overall optimistic outlook remained stable at over one-third.

　　Although the sentiment in the first tier market is steadily recovering, we still see a significant contrast between the subjective expectations of the market and the sales data. This contrast is not only reflected in our quantitative research data, but also in the actual "perceived temperature" of colleagues in the industry.

　　Manufacturers and agents of different brands, as well as the roles of different industry value chain links, have vastly different "perceived temperatures" for the industry and market due to their different ecological levels and regional market environments.

　　In addition, we all tend to judge good or bad based on immediate benefits and gains or losses, and the same applies to the market. The comparison of more people's expectations is actually a comparison of month on month expectations. According to convention, when the market weakens in July and August, it will naturally feel colder. Even compared to the same period last year, sales in many regions have already shown an unstoppable decline, and have even shown varying degrees of continuous positive growth.

　　If we can partially detach ourselves from our subjective stance and environment, partially set aside our emotions and biases, and objectively view the rebound of the domestic construction machinery market, we will encounter two problems: first, will this rebound trend continue, and how high will the rebound be? Secondly, what does the rebound mean for the upstream and downstream industry entities in the value chain of the construction machinery industry?

　　Looking back at the development history of the past two years, logistics engineering machinery has taken the lead, used excavator followed by earthmoving engineering machinery. The bottoming out and rebound process of the domestic engineering machinery market in this cycle has already passed the bottom of this downward cycle and is now entering an upward cycle with certainty.

　　However, due to the differences in the pace of cyclical linkage, some sub products and regional markets are still in the process of bottom adjustment, and this asynchronous time difference is expected to be around six months or even a year.

　　The certainty of the rebound process, although it means a gradual recovery and warming of the market, does not necessarily mean a true repair of industry and even market confidence, because there is still a certain degree of uncertainty in the magnitude of the upward trend in this cycle under the premise of a slight reduction in total industry demand.

　　In addition, the internal competition in the industry has also led to a significant reduction in profits or even loss making operations for the upstream and midstream of the value chain, especially for channel agents and suppliers. The phenomenon of host manufacturers defaulting on payments to spare parts suppliers and agents selling products with inverted profits has become increasingly bizarre. This strange phenomenon has even spread to the field of new energy engineering machinery products, where the penetration rate is accelerating. In order to occupy the market, some brands of electric loaders have reduced their annual prices by more than 13%.

　　From the perspective of sales gross profit alone, this type of loss making sales relies to some extent on the support of the capital market and expected price wars. In order to absorb losses and achieve good financial statements, some industry enterprises have once again experienced a large-scale layoff trend, and a certain brand has even directly cut off the strategic department of the group.

　　used excavator This internal competition not only leads to a decrease in profits for relevant stakeholders, but also results in a wait-and-see attitude among end user groups to delay purchases. Major manufacturers also have to shift their attention and strategic focus to overseas markets to cope with broader market opportunities and greater uncertainty.

　　Although the author holds an optimistic attitude towards the medium to long term export trend of China's construction machinery industry. However, it cannot be ruled out that due to factors such as the trade war, there may be short-term obstacles to exports, and the production capacity that should be exported may return to the domestic market, which will inevitably exacerbate industry competition.

　　From a competitive perspective, foreign brands such as John Deere, Case, and Kato have gradually withdrawn fromused excavator the Chinese construction machinery market, which is partly due to internal competition and also related to the lack of foresight like Caterpillar and other brands to layout localized supply chains earlier.

　　used excavator However, if the current internal competition is not sustainable and European, American, Japanese, and Korean companies do not fully follow the price war, it can also be a temporary "strategic abandonment" choice. However, after the integration and elimination of some brands in this cycle, and the loss of some supply chains and key channels, entering this market again will come at a significant cost.

　　From the perspective of the global market situation, after competition enters equilibrium, there are both local brands and other globalized foreign brands in different regional markets, especially in mature markets. This result is not only the result of full competition, but also the result of different brands' strategic games based on sustainable development. After achieving market swaps, trade frictions and conflicts between countries will be relatively mild.

　　Despite the competition in sales and market share in the construction machinery industry, it is based on the scale required for survival. However, when most brands rely on this to achieve sales targets through bottomless competition, the possibility of overcapacity, insufficient profits, delayed purchases, and channel accumulation risks without beneficiaries in the entire industry is even greater.

　　used excavator Where will the domestic construction machinery market go? It depends on the choices of all our industry colleagues. For the group of host manufacturers who are the industry leaders, there may be two options. One is to get rid of the internal competition and truly achieve the transformation of new quality productivity after creating the miracle of Made in China and major national heavy machinery; One is to continue participating in vicious competition and win a lose lose game with no winners.

　　The Politburo meeting held on July 30th pointed out the need to strengthen the research and development of key core technologies and promote the transformation and upgrading of traditional industries. We need to strengthen industry self-discipline and prevent vicious competition in the form of internal competition. Strengthen the mechanism of survival of the fittest in the market and unblock the channels for theused excavator exit of outdated and inefficient production capacity.

　　used excavator Under this policy guidance, the author is more inclined to believe that colleagues in enterprises who have undergone multiple cycles of testing can make more rational strategic choices and seize the rare rebound opportunities in the upward process of this cycle, achieving reasonable profits for a company or even an industry.

　　Only in this way can every individual living in this industry have the possibility of achieving a better life.

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Where will the domestic construction machinery market go

High quality and low price

We guarantee the quality of each machine and promise to offer you the most favorable price.

Where will the domestic construction machinery market go

We guarantee the quality of each machine and promise
to offer you the most favorable price.