Outlook for Construction Machinery Industry in 2023

Seetao 2023-02-01 10:25
  • A batch of international advanced level engineering equipment has been put on the market one after another
  • With the implementation of a package of policies and measures to stabilize growth, the construction machinery market is expected to stabilize and rebound in 2023
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In the face of the impact of the epidemic, revitalizing the economy has become the top priority, and the importance of infrastructure investment is self-evident. The equipment manufacturing industry is the country's most important weapon and an important part of the country's real economy. As an important sector of the equipment manufacturing industry, from 2012 to 2022, the domestic market satisfaction rate of my country's construction machinery industry has increased from less than 90% in 2012 to more than 96% at present, and the output of major products such as excavators, cranes, and loaders ranks first in the world First.

my country has formed 22 major categories of construction machinery products, becoming one of the countries with the most complete product categories and varieties. At present, a number of construction machinery industry clusters with obvious scale effect and strong industrial chain driving force have been formed in Jiangsu, Hunan, Shandong, Guangxi and other places. the

According to the sales bulletin of major products in the construction machinery industry in 2022 released by the China Construction Machinery Industry Association, domestic sales are generally saturated, while in the low-to-medium range of the international market, a stable export volume has basically been maintained. According to the analysis of professionals, the digitalization, networking and intelligence of the construction machinery industry in the future will accelerate the transformation of the industry. Compared with foreign mid-to-high-end competing products, the overall automation level of my country's construction machinery industry is low, and it still follows the mechanization-electrification-automation layout and development; the company has updated its product information system, integrated and optimized manufacturing execution system, and business management system. The speed is slightly slower, resulting in repeated setbacks in the field of intelligence in the benchmarking with foreign competing equipment.

Half of the enterprises in the domestic construction machinery industry already have the awareness of intelligent manufacturing, but most of them are still in the research and wait-and-see stage. Among the enterprises that have carried out intelligent transformation, most of them have only completed the single coverage of intelligent manufacturing, and are still in the transition period of intelligent transformation of the whole workshop. Only the leading enterprises are in the breakthrough period of intelligent manufacturing technology. Among them, leading enterprises such as Sany Heavy Industry and XCMG have been at the forefront of the industry in their intelligent construction.

Construction machinery industry and digital navigation

According to the Ministry of Industry and Information Technology's announcement of the 2022 list of pilot demonstration projects for the integrated development of new generation information technology and manufacturing, a total of 8 equipment manufacturing companies were selected for the direction of "digital navigation" proposed for the first time this year, including Zoomlion and Sany Heavy Industry.

As early as 2019, Zoomlion successfully developed a 5G remote-controlled excavator, using the characteristics of 5G's high speed, large broadband, and low latency to realize remote control of the excavator. In terms of the integration of 5G technology and construction machinery and equipment, Zoomlion has won praise from users for its 5G remote control of excavating machinery, tower cranes, pump trucks and other equipment.

Hollow boom technology, carbon fiber concrete pipes, intelligent functions such as human-machine voice interaction, tower crane ETI intelligent control system, etc., a series of cutting-edge technologies are too numerous to list, which is very in line with Zoomlion's low-key and pragmatic temperament and scientific research institutes Strong research and development strength from incubation.

In terms of the application of new energy technologies, Zoomlion has been at the forefront of the industry. Zoomlion's pure electric vehicle crane, in addition to adopting new energy technology, has integrated machine vision, artificial intelligence and 5G communication technology to make it a crane that "has eyes and can think" and can realize one-key hoisting, etc. Intelligent functions allow "novice people" to carry out hoisting operations.

In recent years, Sany Group, with the determination and courage to "turn over or capsize", has unswervingly promoted the transformation of digital intelligence, and has built "smart products", "smart manufacturing", and The three types of intelligent scenarios of "smart operation" reconstruct and drive business development with digital intelligence, and enhance the overall digital intelligence capabilities and core competitiveness of enterprises.

As the company's first major strategy, Sany Group's digital intelligence strategy can be summarized as "1+5": "1" refers to the leader's entry into the game, and "5" represents the five starting points of transformation - electrification and intelligence, process four Chemicalization, eight major software applications, data acquisition applications, and lighthouse factories.

Among them, in terms of "lighthouse factories", Sany Group has successfully established the only two world lighthouse factories in the global heavy industry industry: Beijing Pile Driver Factory, Changsha No. 18 Factory Building, and the first overseas "lighthouse factory" in China's construction machinery industry—— The Indonesian factory is constantly exporting new technologies, new practices and new experiences in the transformation and upgrading of China's smart manufacturing.

Looking forward to 2023, can the high growth trend of the industry continue?

As we all know, construction machinery is a typical cyclical industry. Once there is a signal of economic recovery, construction machinery companies have strong performance growth expectations, which are closely connected with the economic cycle.

From the perspective of global demand, the high growth of the construction machinery industry is slowing down, which is not optimistic in the short term. The total global construction machinery market reached its historical peak in 2019. In 2019, the Chinese market accounted for 24%, second only to North America. In 2020, only China is on the rise in the world's major markets, while other countries' markets are falling, accounting for more than 30% of the value. From the perspective of growth rate, the number of construction machinery and equipment in my country has increased from 4.47 million units in 2010 to 8.30-8.99 million units in 2020, with a growth rate of 3.44%. Combined with the data in recent years, the growth rate has a significant slowdown trend .

The reason is simple, because the demand for construction machinery is essentially related to two factors: one is the renewal cycle of its own equipment, and the other is the economic cycle, especially the investment cycle of infrastructure and real estate. Taking excavators as an example, due to the large-scale economic stimulus from 2008 to 2011, the massive increase in civil engineering directly led to explosive growth in the demand for construction machinery. Excavators increased significantly from less than 80,000 in 2008 to more than 170,000 in 2011. Later, the policy changed, and the demand for construction machinery fell all the way. By 2015, the national sales of excavators were only 50,000 units, a drop of 70% compared with 2011. However, in 2016, a new round of policies stimulated the demand for replacement of superimposed equipment, and the construction machinery industry began to grow explosively again. The sales volume in 2020 has risen to more than 320,000 units.

In 2023, the market environment will begin to undergo new changes. Whether it is infrastructure or real estate investment, relatively speaking, there will be relatively large downward pressure. On the one hand, infrastructure is constrained by local debts, and its own scale is already quite large and complete, so the incremental market is very limited; on the other hand, the real estate market has entered the "silver" era and gradually began to advance towards the "black iron" era. The overall demand for new house construction is relatively shrinking, so combined with the current situation of the two major markets, the construction machinery industry, like most cyclical industries, is heading towards a sunset industry. It is just a matter of when the sunset will come.

But if you study carefully, you will find that, from the perspective of supply, construction machinery has a certain "moat" compared with other industries. First of all, construction machinery is not like large-scale special-purpose equipment such as lithography machines, which is extremely dependent on a small number of B-end customers. Relatively speaking, the distribution of its customers is relatively scattered, which makes companies with brand effects still live well in the down cycle of the industry and improve their products. Second, construction machinery belongs to the large-scale industrial manufacturing industry. Although the technical content is not as high as that of high-tech enterprises such as lithography machines, it has relatively high requirements for cost control, process management and scale effect, which is beneficial to leading enterprises and also beneficial Enterprises participate in overseas markets.

As China's independent innovation road goes further and further, many domestic machinery and equipment companies have begun to have the ability to challenge international giants. In the field of construction machinery, the market share of domestic OEMs such as Sany Heavy Industry and Xugong Machinery has continued to increase, and they have gradually replaced Caterpillar, Komatsu and other European, American and Japanese OEMs in the market. Companies including Hengli Hydraulics and Eddie Precision are also gradually challenging traditional international giants such as KYB, Kawasaki Heavy Industries and Rexroth.

There are two main domestic advantages: First, the country has the most complete industrial chain supporting advantages. my country has a wide variety of construction machinery, and is one of the countries with the most complete product categories and varieties of construction machinery in the world. It has 20 categories, 109 groups, 450 models, 1090 series, and tens of thousands of models of product equipment. The second is the domestic engineer bonus. In the past ten years, China has graduated nearly 70 million college graduates and more than 5 million graduate students. As of 2020, China has the largest number of R&D personnel (research and development and experimental development personnel) in the world, the second largest investment in related funds, and the second largest number of patents in the world. However, the proportion of overseas business is still very low, and 90% of the performance support comes from domestic business. If Chinese companies can grab the share of overseas companies in the international market in the future, it is expected to break the curse of the industry cycle.

In general, the construction machinery industry is an industry with a relatively good supply and demand pattern in the large-cycle industry. On the one hand, demand is increasing steadily, especially in overseas markets. On the other hand, the supply side also has a certain moat. Editor/Xu Shengpeng