Overseas sales of Chinese excavators "explosive"

       At present, with the gradual relaxation of overseas epidemic control, European and American countries have increased their infrastructure construction in order to restore the economy, and the international market has also increased the rigid demand for Chinese construction machinery.

It is worth noting that the overseas demand for domestic construction machinery is booming, and it is still facing the challenge of soaring shipping prices and the shortage of resources for the export channel of "one box of hard-to-find" cargo.

According to the analysis of market institutions, overseas exports of construction machinery excavators continue to exceed expectations. With the mature sales and financing channels of industry giants in the future, overseas markets are expected to gradually enter the harvest period.

In the first quarter, the accelerated recovery of the external economic prosperity drove the overseas sales of domestic construction machinery.

On July 6, according to the statistics of 26 excavator manufacturers from China Construction Machinery Industry Association, from January to June 2021, a total of 223,833 excavators were sold, a year-on-year increase of 31.3%; of which, 30,133 units were exported, a year-on-year increase of 107%. In June alone, 23,100 excavators of various types were sold, of which 6,135 were exported, an increase of 111% year-on-year.

In 2020, the overseas market sales of SANY excavators exceeded 10,000 units, a year-on-year growth rate of more than 30%. Public data shows that in the first half of this year, SANY's overseas market sales exceeded 10 billion yuan, a year-on-year increase of 100%, of which the sales of excavators in Europe increased by 99%.

"Overseas markets have relatively large opportunities." Xiang Wenbo, president of Sany Heavy Industry, believes that there will be some fluctuations in the domestic construction machinery market in 2021, but new environmental protection upgrades and an aging population will accelerate the replacement of machines.

With the strong recovery of overseas markets in the first half of the year, Liugong's overseas sales of construction machinery products increased by more than 80% from January to June, and sales of excavators in Africa doubled.

"The overseas epidemic last year suppressed some market demand for foreign excavators." On August 3, Zhang Jinjin, Marketing Director of the International Marketing Division of Sunward Intelligent, told the reporter of China Economic Weekly that the domestic excavator sales have entered a stable stage, and the market has been trending. However, the sales of excavators in foreign markets ushered in a golden opportunity period.

In the first half of 2021, Sunward's export sales of intelligent excavators accounted for approximately 25%. "At present, we are also mobilizing resources from all parties to fully expand production capacity." Zhang Jinjin predicts that the overseas excavator market will continue to grow at least for the next two to three years.

In the first half of the year, the sales of Zoomlion's excavators also went up, and in the second quarter, the year-on-year growth of Zonda's excavators exceeded 60%.

Benefiting from the booming overseas market, both leading companies and market segment companies have produced "bright" performance.

From January to June, Sunward Intelligent is expected to achieve a net profit of 458 million to 578 million yuan, a year-on-year increase of 15% to 45%; Xugong Machinery is expected to achieve a net profit of 3.6 billion to 4.2 billion yuan, a year-on-year increase of 74.61% to 103.71%; Liugong predicts Realize net profit of 712 million to 883 million yuan, a year-on-year increase of 5% to 30.2%; Shantui shares are expected to achieve a net profit of 129 million to 161 million yuan, a year-on-year increase of 100% to 150%.

The net profits of the four companies have increased year-on-year, and Shantui shares have the highest growth rate, reaching 100% to 150%.

On August 4, Xiao Dewei, a researcher at Caixin Securities, said in an interview with China Economic Weekly that for overseas markets, domestic brands of construction machinery have been deployed for many years, and a good brand effect has been established. Driven by the recovery of overseas demand and the globalization strategy of domestic brands, exports will continue to maintain strong growth in the future. And those domestic leaders that value the expansion of overseas markets and have achieved significant internationalization strategies are expected to take advantage of the strong growth of overseas markets to become global leaders.

Although the overseas market demand for domestic construction machinery is strong, it is also facing logistics challenges.

Since January 2021, container shipping prices have increased four times. The soaring shipping cost has brought certain cost pressures to construction machinery manufacturers, and the phenomenon of “difficult to find one box” of containers has also affected domestic excavator export manufacturers.

A person from Sany Heavy Industry told the reporter of China Economic Weekly: “Overseas epidemics have repeatedly caused the industrial chain and supply chain of many countries to be impacted, and China has become a global production plant and has received a lot of export orders. Domestic exports of various materials are squeezed. The large amount of shipping space has made the export situation of excavator shipping really tense. We have tried every means to ensure the supply every day."

Zhang Jinjin, Marketing Director of Sunward Intelligent International Marketing Division, introduced: "The imbalance between supply and demand of shipping capacity has led to a soaring cost, which has a great impact on the export of corporate excavators. It is really not easy to order a container."

With the extreme shortage of global containers, the contradiction between supply and demand of capacity faced by China and major ports still cannot be resolved in the short term.

"China Economic Weekly" learned that in order to open up the excavator export channels, some construction machinery export manufacturers began to "see another channel."

Sany Group began to expand into railway transportation channels. For example, products shipped by sea to the Russian Far East are now being transported by rail; Central Asia used to rely on cross-border road transport, but now it is mainly transported by rail.

Facing the difficulties in export logistics, Zhang Jinjin said: “It’s not that there is no way to think about it. The conventional method is to order containers in advance and reasonably arrange diversified export channel resources. Of course, we will also communicate with dealers to book container shipments in advance. Shipping costs are shared proportionally for shipments; some agents will also solve the shipping logistics problems by themselves and arrange the shipping machinery on their own."

On August 3, a person with more than 20 years of experience in the shipping industry told a reporter from China Economic Weekly that in the face of the challenge of “one box is hard to find” in the shipping market, aviation companies should work with construction machinery companies to design them The logistics plan and optimized path provide transportation guarantee for the export of leading construction machinery enterprises, which is of great significance to escorting the domestic and foreign trade economy.