As the global impact of the new crown epidemic has gradually improved, the international engineering construction market has begun to pick up. Recently, with the sound of the vigorous and high-pitched whistle, a huge Chinese ship carrying nearly a thousand XCMG excavators, loaders, graders and other construction machinery products set sail from the port of Lianyungang, Jiangsu, to South America. This is the largest single-batch export order for China's construction machinery industry in the past five years.

Lu Ying, deputy secretary-general of the China Construction Machinery Industry Association, told reporters that since 2021, overseas exports of construction machinery have continued to exceed expectations. With the gradual optimization of sales and financing channels in the future, leading domestic construction machinery companies are expected to gain gains in overseas markets. Period.

Export trade volume hit a record high

Since 2021, domestic construction machinery manufacturers have been extremely busy. From production workshops to sales channels, they are often at full capacity. Orders from home and abroad have filled the schedule. On the large visual screen of Sany Logistics, shiny lines of "orders in transit" intensively connect China with the rest of the world. Huang Dong, head of the international business department of Sany Logistics, said that more than 3,000 pieces of equipment have been delivered throughout June, which is "very busy".

Behind the busy order delivery is the "pretty good-looking" overseas business. In the first half of 2021, SANY Group’s international sales revenue increased by 80% year-on-year, and sales revenue in most major markets achieved growth. Among them, 50 countries and regions have increased by more than 100%, including developed countries such as France and Russia. There are also developing countries such as India, Indonesia, and Vietnam with high development quality.

XCMG's export performance, also a leader in construction machinery, is also very impressive. “In the first half of the year, XCMG’s exports increased by more than 70% year-on-year.” According to Lu Chuan, President and Deputy Secretary of the Party Committee of XCMG Construction Machinery Co., Ltd., XCMG products have been distributed in 187 countries and regions around the world, covering 97% of the products along the “Belt and Road”. Countries, which ranks first in export share in 30 countries.

According to customs data, the export value of China's construction machinery from January to June 2021 was US$15.071 billion, a year-on-year increase of 54.9%. The export value of the month in June was US$3.156 billion, an increase of 94.8% year-on-year.

"The total export volume in the first half of the year exceeded 15 billion U.S. dollars in one fell swoop, with an increase of more than 50%, which is a 46.2% increase from the record high in the first half of 2019." Lu Ying said that the growth in the second quarter was significantly higher than that in the first quarter, and the growth rate in the second quarter was 61.9. %, 15% higher than the growth rate in the first quarter. In particular, in June, the export volume reached the US$3 billion level for the first time, setting a monthly record, nearly doubling compared with the same period last year.

In terms of quantity, all types of construction machinery products are increasing. From the enterprise level, domestic and foreign-funded enterprises have experienced rapid growth in exports. Large enterprises such as Sany and XCMG have grown significantly, and small accessory parts companies are also growing.

As for the reason for the overall growth, Lu Ying analyzed that the confluence of a variety of factors has created a higher-than-expected export high. On the one hand, relatively speaking, the global construction machinery industry has a relatively long industrial chain, and the epidemic has broken the normal supply chain, while China’s industrial chain is relatively complete, and the overseas marketing and service systems of enterprises are becoming more and more effective. On the other hand, affected by factors such as economic recovery after the epidemic in the international market, there is a strong demand for construction machinery in the international market. Coupled with the increase in the prices of bulk commodities such as steel and coal, mining is further boosted by the demand for construction machinery. In addition, the rescue policy in the context of the epidemic is also helpful to enterprises.

Going to the international market must play a "combination boxing"

Behind the huge increase in construction machinery exports is the solid product reliability, and it is also the “combination punch” that is steadily hitting the international market.

XCMG unswervingly promotes the localization strategy of key overseas regions, deepens the main battlefields in Africa, Southeast Asia, West Asia, Central Asia, etc., and leverages the radiating role of European R&D centers and Brazilian manufacturing bases on the high-end market, in technological innovation, talent cultivation, and market development. An efficient global collaboration system has been built.

Lu Chuan bluntly said that in the future, XCMG will continue to resolutely promote the main strategy of internationalization, but the expansion of the international market does not rely on the company's alone, but on the deep integration of the supply chain, industrial chain, and value chain. Sany has also made great progress in service capacity building, agency system building, service accessory system building, and digitalization work since 2021 by enriching its channel models and supporting domestic agents to go overseas and other innovative measures.

Lu Ying said that with the development of China's construction machinery industry, there is no longer an absolute capability gap between domestic brands and international brands. However, due to the long-standing brand positioning in the international market, domestic brands are still facing considerable challenges to move from a Chinese leader to a global leader. From a regional perspective, the largest export market is Asia, which accounts for half of the export volume, and the second largest market is Europe, where the export volume is slowly increasing. The market size of Africa and South America is limited, while international brands have a long history of entry and their advantages are even more obvious.

It can be said that at present, China's construction machinery is still in an exploratory period in the overseas market. Lu Ying believes that in terms of accumulating experience, cultivating teams, establishing brands, clarifying ideas, and changing concepts, none of the domestic construction machinery companies is absolutely in place, and none of them has not been moved, but the overall situation is uneven. He said that domestic companies have begun to explore multiple routes, such as local brands, foreign factories, localized operations, etc., no matter what method is used to explore, and regardless of the final result, as long as the energy is used, there will be progress. This progress is "tinder".

In addition, Lu Ying also pointed out that if we can promote the establishment of overseas financial platforms, leasing platforms and second-hand machinery trading platforms, it will greatly help Chinese construction machinery companies to "go global."

Facing the test of growth rate in the business cycle

The hot sales situation is gratifying, but can this trend continue? Since the recovery of the construction machinery industry in the second half of 2016, if calculated according to the industry's original cycle of about 5 years, the industry will enter an adjustment cycle in 2021 or 2022. Xiang Wenbo, president of Sany Heavy Industry, believes that the construction machinery industry is still cyclical. After several years of rapid growth, sales of excavators in China hit a record high last year, exceeding 330,000 units, and will increase again in 2021. What is this concept? That is, the sales volume of excavators in China is close to the total sales volume of all other countries outside of China.

"In the second half of the year, I think the growth rate will definitely decline." Xiang Wenbo predicts that the whole year should be flat or slightly increased. This adjustment of the growth rate is reasonable from the perspective of the development law of the construction machinery industry.

In Lu Ying's view, the trend of export growth is still in sight, because the price of bulk commodities has not come down, and there will be heating demand after the winter, and coal consumption will increase. Without the influence of other changing factors, there is a high probability that construction machinery exports will achieve a very significant increase in 2021.

"If we talk about the cycle, we must reposition." Lu Ying said that the market is so big that it cannot continue to grow at a high speed. In the second half of the year, the growth rate must have declined for several months. At present, the international export volume and the domestic market size are not in the same order of magnitude. It is difficult to say that it can make up for the vacancy of the domestic slowdown, but it can play a certain balance.

Regarding market concerns, Lu Ying said, “The industry will not experience a cliff-like decline in 2021.” He said that the construction machinery companies that have experienced the last cycle are mentally prepared and wary of the industry cycle and will no longer be like the previous round. Throw in so recklessly. As long as there is preparation, the impact is limited. Editor/Xu Shengpeng