Great changes in market environment, engineering machinery is accelerating

It has long been asserted that this day will come, but no one can imagine that it has come so fast. In the absence of global construction machinery companies, the giants of China's construction machinery industry have targeted the world's top engineering machinery companies.

Behind the rapid transformation of potential energy, the huge changes in the market environment of construction machinery in China are implied. With the rapid development of China's economy, China's construction machinery industry has also entered a rapid development process.

Su Zimeng, secretary general of the China Construction Machinery Industry Association, told reporters that this is a manifestation of the overall strength of China's construction machinery. Moreover, these three companies have already entered the world's most powerful companies in the field of construction machinery.


Su Zimeng, Secretary-General of the China Construction Machinery Industry Association: Xu Gong, Zoomlion, and Sany are all planning to enter the world's top three in 2015. Who will win and who will lose the Big Three?

Su Zimeng: I personally think that the comprehensive strength of XCMG, Zoomlion, and Sany Heavy Industry can compete with any construction machinery company in the world. In the future, these three companies will not lose and they will all win.

Reporter: Is the distance between local construction machinery companies and giants of global construction machinery companies such as Caterpillar and Komatsu narrowed?

Su Zimeng: I think that Xugong, Zoomlion, and Sany are no worse than Caterpillar and Komatsu. Even our company has surpassed these global giants in some respects. For example, China is already the first place in concrete machinery. The top three of the past in this field have all been acquired by Chinese companies. In fact, before the acquisition, Sany Heavy Industry and Zoomlion have also surpassed them. If they compare with Caterpillar and Komatsu, they have almost no concrete machinery or cranes. In addition, XCMG is the world's largest manufacturer of truck cranes, and Zoomlion ranks second in the world. In fact, these three companies are not much worse than Caterpillar and Komatsu in their field of expertise, but they are much better than they are in areas where they are not good at.

The comprehensive strength of the three companies XCMG, Zoomlion, and Sany Heavy Industry in the field of construction machinery is already the strongest in the world. It can be proved that Caterpillar and Komatsu are the strongest earth-rock machines in the field of construction machinery, while other products have no advantage, but their market is very wide and their output value is very large. It should be noted that in companies such as Caterpillar, there are a large number of non-engineering machinery products, such as remanufacturing, etc., and they have a large proportion.

Reporter: The European debt crisis gave a good opportunity for overseas acquisitions by Chinese construction machinery companies.

Su Zimeng: It is indeed a good opportunity to go out and buy. Moreover, from the recent acquisitions of Chinese construction machinery companies, they all belong to horizontal acquisitions. The target companies are multinational companies that are in the same industry as us. I like this kind of acquisition. Because of the minimal risk of horizontal acquisitions, for companies with certain integration capabilities, post-acquisition integration will be completed quickly and quickly used for me.

The ultimate goal of the acquisition is to gain the right to speak of the industry in the world. In other words, the acquisition is only the beginning, and the integration after the acquisition is the key. It takes more time and effort. This includes the acquisition of the target's core technology, brand, marketing channels, and the most important talents. The difficulty lies in whether you are really familiar with the local laws and policies, human environment and other software. However, I hope that people from all walks of life should give these Chinese construction machinery companies going abroad some time, because from the signing of the acquisition to showing the effect, this requires a process. I believe these acquisitions will be successful.

Reporter: Will the marketing of credit sales accumulate risk?

Su Zimeng: The sales of construction machinery products are various, and sales in Europe and the United States have long been a mature sales method. The biggest question is how companies can control risk. Zero down payment is a test for enterprises, who can grasp the risk of payment, who is a master. As far as we know, these large companies in China are still highly capable of controlling this risk. Even if they have a zero down payment, they are also targeting a high-quality customer with a high degree of credit. This situation has not occurred on a large scale.

But this phenomenon has got the attention of the association. Last year, the association held a related meeting called “Opposing Zero Down Payment and Enhancing Industry Self-discipline.” We expect to take measures to keep this risk in a controllable state. At present, the situation that the overall risk of the industry has been pushed up due to credit sales has not yet emerged.

Reporter: What are your expectations for the construction machinery industry in 2012?

Su Zimeng: The association’s overall forecast for this year is about 12% growth in the industry. However, a drop of nearly 20% may occur in the first half of this year. There are two reasons for this: First, due to the appearance of the country’s macro-control in the construction machinery market since last year, there has been a clear feeling in the first half of this year for companies with declining demand; secondly, in the first half of last year, the market was too hot, sales and growth rates were both high. This is something that history has never had in the same period. In contrast, the probability of a year-on-year decline in the first half of this year is very high, but the construction machinery market will rebound in the second half of the year, and the number of project starts in some places has also risen recently. From the situation I have grasped in June, many companies have seen an increase from the previous quarter. However, overall, China's construction machinery market will grow steadily this year, and the 12% increase should be reasonable. The increase in exports will be better than the previous two years, reaching more than 30%.

By the end of the “Twelfth Five-Year Plan” period, we expect the total fixed-asset investment growth rate will be around 20%, and urban investment will still account for about 85%. By 2015, China's market demand for construction machinery will reach 837 billion? 851 billion yuan. Taking into account the further expansion of import and export surpluses, and further increase in the added value of product technology, we forecast that the industry-wide sales scale in 2015 will reach 900 billion yuan, with an average annual growth rate of approximately 17%.

Reporter: What are the biggest problems constraining the development of China's construction machinery enterprises?

Su Zimeng: It is still a high-end core component. The engines, hydraulic components, and electronic control systems of hydraulic excavators and other large construction machinery are mainly imported from Japan and Germany. But two or three years ago, China's construction machinery companies have realized this problem. Including associations, related issues have been carried out. For example, under the guidance of the Ministry of Industry and Information Technology, the “Leading High-end Hydraulic Component Cooperative Industry Platform” established by the Association led by more than 30 companies in the industry was established last year, and some substantive work is underway.

In addition, XCMG has already acquired two professional hydraulic components companies in Europe and has established a joint venture with Doosan Corporation of Korea; Sany Heavy Industry, Zoomlion, and Liugong have already adopted their own forms of cooperation with external companies. Settle to solve this problem. It is believed that the effect will be shown soon. When this problem is solved, China's construction machinery companies will again reach new heights.