The Excavator Industry Is Booming, And the Competitiveness of Domestic Brands Is Strengthened

An excavator is a shovel that uses a bucket to excavate materials on the top or top of a haul truck, and then load it into a transport vehicle or unload it in a yard. The excavated objects are mainly soil, coal and silt and loose rocks. From the perspective of the development of construction machinery in recent years, the development of excavators is relatively fast, and has become one of the most important construction machinery in engineering construction.

Affected by the new crown pneumonia epidemic, the global demand market and supply system have been impacted to varying degrees. However, under the unified command, efficient operation, rapid response, and scientific tracking, China has taken the lead in controlling the epidemic, providing an important prerequisite for the economy to get back on track. In addition, the process of new infrastructure construction has accelerated, and the demand for the excavator market has rapidly rebounded. The overall development of the machine is good. Data show that from January to November 2020, the sales volume of excavators was 328,000 units, a year-on-year increase of 39%. Among them, domestic sales and exports were 293,000 units and 35,000 units, with year-on-year growth of 40.1% and 30.5%, respectively. The growth rate of domestic sales was slightly higher than that of exports. It is estimated that in 2021, excavator sales will maintain a growth of more than 10%.

Small Excavators Are More Popular

In terms of domestic excavator product classification, small excavators have the highest utilization rate. Data show that from January to August last year, the cumulative sales of domestic small excavators were 116,082 units, accounting for more than half of the total market. In December 2020, domestic large-scale excavators sold 3,517 units, accounting for 12.9%; medium-sized excavators sold 7,451 units, accounting for 27.3%; small excavators sold 16,351 units, accounting for 59.8%.

Excavators are a variety of construction machinery closely related to downstream industries such as infrastructure construction, real estate, and mining, and the development of the industry is greatly affected by the downstream sectors.

Infrastructure Investment Drives the Growth of the Excavator Market

Excavators are very important equipment in infrastructure construction, and their manufacturing and sales are closely related to the development of infrastructure projects. Affected by the covid-19 epidemic, the global economy has been hit hard and downward pressure has increased. After March last year, the process of resumption of work and production has been further accelerated. Many large-scale infrastructure construction projects have entered normal operation. The growth rate of infrastructure investment has greatly increased. Infrastructure construction has clearly driven the recovery of the excavator industry. In March 2020, the growth rate of domestic excavator sales was much higher than that in February. The total sales volume of the excavator industry is 49,408 units, an annual increase of 5130 units. Among them, the sales volume of small excavators was 31,616 units, an increase of 18.49% year-on-year, driving the excavator industry's growth of 96.2% in March.

The Growth of Excavators in Rural Areas

The continuous construction of urban-rural integration and poverty alleviation in rural areas carries a large number of potential engineering projects. The demand for rural reconstruction is mainly reflected in farmland water storage, environmental reconstruction, land and housing project construction, and rural infrastructure construction. In addition, the rural labor force is shrinking, especially the work-age population of the right age has dropped sharply, and the replacement of excavators and oil pump trucks in construction work has become more obvious. From a policy point of view, the sustained high growth of small excavators is consistent with the trend of fiscal poverty alleviation expenditures. The construction of rural areas has become a very important link.

Real Estate Investment And Effective Demand For Excavators

Real estate investment can be divided into many expenses, including construction and installation engineering, tool purchase. The purchase of excavators belongs to the category of fixed asset investment. The data shows that from January to February 2021, the national real estate development investment was 1,398.6 billion yuan, a year-on-year increase of 38.3%, an increase of 15.7% over the period from January to February 2019, and an average increase of 7.6% over the two years. With the increase in investment in real estate development across the country, excavators as indispensable engineering equipment are expected to benefit from it.

The Competitiveness Of Domestic Brands Has Been Strengthened, But They Have Not Been Fully Developed

Excavator is an important sub-industry of the construction machinery industry, and it is related to the formation of the global construction machinery industry pattern. Today, China has become the world's largest excavator market. In 2020, the business of multinational companies such as Europe, America and Japan decline, but Chinese construction machinery companies have achieved growth against the trend, showing strong resilience and vitality, which will have a profound impact on the global construction machinery industry structure.

In recent years, the upgrading of the domestic excavator market has accelerated, and the degree of concentration has continued to increase. The strength of domestic brands has been increasingly strengthened, and the market share has exceeded 60%. Since the 1990s, during the period of reform and opening up, the construction of infrastructure has been continuously promoted. Foreign brands have seized the historical opportunity to enter China in a large scale, established factories in the form of joint ventures or sole proprietorship, and quickly swallowed the Chinese market. At that time, more than 90% of the market The share is occupied by international brands. Due to the relatively weak domestic industrial foundation, the early development was curbed by all aspects of international manufacturers. This has also forced domestic companies to catch up, focusing on excavator manufacturing technology, corporate management, product sales and services, and finally broke the original market pattern in a few years. Domestic excavator brands are also accelerating the rewriting of the industry pattern, but the core supporting issues have not yet been fundamentally resolved. There is plenty of room for development of domestic excavator brands. In the short term, the market share of domestic brands is expected to continue to rise, and the long-term development is generally good.

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