Urbanization helps excavator industry to boom in 2013

　　Excavator sales were sluggish in 2012, but are expected to surge in 2013

According to industry data from the Secretariat of the Excavator Machinery Branch of the China Construction Machinery Industry Association from January to September 2012, the 28 main engine manufacturing enterprises included in the statistics sold a total of 95978 hydraulic excavator products of various types during the same period, a decrease of 36% compared to the same period last year. In the first quarter, a total of 44166 units were sold, a decrease of 40.8% compared to the same period last year; In the second quarter, a total of 34526 units were sold, a decrease of 32.6% compared to the same period last year; In the third quarter, a total of 17286 units were sold, a decrease of 28.2% compared to the same period last year. From the perspective of year-on-year decline, the year-on-year decline in the second and third quarters of this year has narrowed. However, the main reason for the narrowing is that excavator sales have started to decline significantly since May 2011.

In terms of brand origin segmentation, the market share of Japanese brands in the small mining machinery market from January to September this year was 19.8%, a decrease of 1.9% compared to 2011; The market share of Korean brands is 16.6%, a decrease of 2.8%; The market share of European and American brands is 7.3%, up 0.5%; The market share of domestic brands is 56.3%, up 4.3%.

The largest change is in the large mining machinery market, with Japanese brands holding a market share of 32.8% during the same period this year, a decrease of 9.6% from the full year market share in 2011; The market share of Korean brands is 13.5%, a decrease of 4.3%; The market share of European and American brands is 25.5%, up 3.5%; The market share of domestic brands is 28.2%, up 10.4%.

In terms of sales volume of mining machinery tonnage, the year-on-year decline in sales volume of mining machinery with tonnage less than 6t, 6-10t, and 10-15 t is relatively small, about 25%, while the decline in sales volume of large mining machinery with tonnage less than 20t, 21t, 22t, 25t, and 30t is relatively large, all of which are over 40%.

In fact, this is related to the economic trend this year. In 2009, under the economic stimulus of 4 trillion yuan, the mining machinery industry experienced rapid growth. However, in 2012, the growth rate not only slowed down, but even recorded negative growth.

However, this situation is about to change. Luo Xuran believes that the newly launched urbanization policy will stimulate the demand for mining machinery in the domestic market. He stated that the sales of domestic mining machinery have stabilized and rebounded in the fourth quarter.

　　Urbanization continues to provide momentum

In the long run, the construction machinery industry remains an industry where the sun never sets. The urbanization process and the updating and development of infrastructure projects have given China's construction machinery industry at least 10 years of development period. The development of global engineering mechanization has led to an increasing demand in the international market, so it is impossible to predict when the international market will reach its peak. Companies like CAT have been steadily growing for over 100 years

In the past 30 years, China has embarked on a path of rapid urbanization. By 2011, China's urbanization rate had exceeded 50%, reaching 51.27%. However, even so, there is still a significant gap in China's urbanization construction compared to developed countries abroad. By 2020, China's urbanization level will strive to reach around 60%.

According to relevant data, for every additional urban resident, the city needs to add 500000 yuan of fixed assets investment, and for every one percentage point increase in the urbanization rate, the rural population flowing into the city will increase by 13 million (calculated by the 1.3 billion population of the country), which will drive 6.6 trillion yuan of urban construction investment. And the fixed asset investment brought about by the urbanization rate increase of less than 10 percentage points will be astonishing.

According to the calculation of fixed assets and infrastructure investment in the national 12th Five Year Plan, the growth rate of the construction machinery industry still needs to be maintained at around 17%. Therefore, in the next 10 years, China's construction machinery industry will continue to grow steadily, but the explosive growth of 10 times in the previous 10 years is unlikely to occur again.