August 2012 excavator sales report released

The year-on-year decline in excavator sales in August has once again expanded compared to July: while the year-on-year decline in sales has expanded, the month on month change is also lower than the seasonal pattern, significantly lower than previous expectations, indicating that demand is still weak.

In August 2012, 28 major excavator manufacturers sold a total of 5495 excavators, a year-on-year decrease of 30.12% and a month on month decrease of 6.64%. The total sales volume of the industry from January to August was 89995 units, a year-on-year decrease of 36.79%. August and July are both off-season months, and in previous years, demand remained relatively stable on a month on month basis, even slightly increasing. However, sales in August this year decreased by 6.64% on a month on month basis, slightly lower than previous expectations. According to information obtained from the industry, we understand that the inventory of dealers in August is still decreasing compared to July, while the demand for terminals is basically the same as July. We analyze that the sales volume in August is not a validation of deteriorating demand. We expect that the industry risk exposure caused by high inventory is gradually decreasing, which is expected to be positive for the medium and long-term development of construction machinery;

Exports continue to grow significantly and their proportion has increased. In August, 678 units were exported, a year-on-year increase of 77.95%, accounting for 12.34%, and continuing to increase from the previous month's 9.79%. Continuation of import substitution. In August 2012, the 9 major foreign brands of excavators sold 2762 units, a year-on-year decrease of 36.05% and a month on month decrease of 4.92%, accounting for 50.26%. The proportion of foreign brand sales from January to August was 52.60%, a significant decline compared to last year. Chinese brands have performed well in fierce competition.

In this month's product structure, the proportion of medium digging has been maintained, while the proportion of large digging continues to decline. After a significant increase in the proportion of medium excavation from 19-30 tons in July, the proportion of medium excavation this month remained at the same level as last month, while the proportion of large excavation continued to decline slightly.

It is expected that excavator sales in September will remain flat on a month on month basis, with a year-on-year decline of around -35%: the vast majority of dealers mentioned that they have not observed any new infrastructure projects starting nearby. Even if the subway project starts, it will have little impact on the sales of construction machinery. Many iron mines and coal mines in the northern region are still being shut down.

Data shows that the current production capacity of China's excavator industry has exceeded 400000 units per year, while the global annual demand for excavators is still less than 400000 units. With the end of the infrastructure boom, the situation of the construction machinery industry has been deteriorating, and the downturn in the industry has now spread to various links in the entire industry chain. Many construction machinery manufacturers have planned to shut down and reduce production, but there are still a large number of products stockpiled in warehouses; The sales volume of distributors and agents at all levels continues to decline; And the buyers of construction machinery suffer greatly from insufficient engineering quantity and reduced profits.

The construction of railways and highways continues to rise: the production of steel and petroleum asphalt for railways has increased rapidly year-on-year, indicating that investment in railways and highways is still on the rise, which is in line with our previous judgment. However, existing equipment still poses significant pressure on sales, resulting in sluggish sales.