This study analyzes the construction machinery industry in China. It presents historical demand data for the years 2000, 2005 and 2010, with forecasts for 2015 and 2020 by product (e.g., loaders, cranes and draglines, excavators, off-highway trucks and bulldozers, mixers and pavers, graders and rollers) and geographic region. The study also considers market environment factors, details industry structure, evaluates company market share and profiles industry participants.
Demand to increase 6.2% per annum through 2015
Demand for construction machinery in China is expected to rise 6.2 percent per year to 387 billion yuan in 2015, supported by continuing gains in construction spending, especially in infrastructure development. Growth in construction activity will be driven by continuing industrialization and increasing personal and business income levels. However, gains will decelerate from the torrid pace of the 2005-2010 period as a result of a moderating outlook for the economy in China as a whole. This will impact total construction expenditures, which are expected to grow at a slower pace through the forecast period, limiting stronger market gains for construction machinery.
The Twelfth Five-Year Plan aims to encourage domestic producers to upgrade their products and improve innovation in product development so as to maintain sustainable growth. These technological improvements, coupled with pricing advantages due to relatively low production costs, will spur growth in shipments of all types of construction machinery by Chinese producers. As a result of such improvements, China will erase its trade deficit in construction machinery and become a net exporter.
Excavators/cranes to remain largest product segment
Excavators and cranes are the largest construction machinery product segment due to their widespread use in both building and nonbuilding construction. The better versatility and flexibility of excavators will also ensure their widespread use in all types of construction applications in China. Loaders, the second largest product type, will see healthy demand increases, benefiting from their functional versatility. Mixers and related equipment will be one of the fastest growing product segments, benefiting from greater use in numerous types of infrastructure projects that are intensive users of cement. Parts and attachments will see the most rapid growth due to favorable government policies under the Twelfth Five-Year Plan.
Northwest region to be fastest growing in China
The size, growth, and composition of construction machinery demand in the six regions of China vary considerably due to regional differences in economic, social, and cultural conditions. In all regions, gains will decelerate from 2000-2010 rates as a result of moderating growth in the Chinese economy. Due to its large share of the nation’s population and economic activity, the Central-East will remain the largest regional market for construction machinery with 42 percent of national demand in 2015. Although small, the Northwest is expected to be the fastest growing regional market, primarily benefiting from the central government’s Great Western Development program.
This study analyzes markets for and manufacturers’ shipments of construction machinery in China. Historical data (2000, 2005 and 2010) and forecasts to the years 2015 and 2020 are provided for both demand and shipments in current yuan. As used in this study, the term shipment” includes all production from Chinese manufacturing sites that is then shipped to both Chinese and foreign markets. The term demand” -- used interchangeably with market,” sales” and consumption” -- is defined as all shipments from Chinese plants, plus imports minus exports. The overall value of construction machinery demand is also provided in US dollars. The official currency exchange rate is used in each year to convert current yuan to current dollars (with the May 1, 2012 exchange rate being used for the 2015 and 2020 forecasts).
Specific products covered are excavators and cranes; loaders; mixers and related equipment (such as concrete pumps and pavers); rollers and related equipment (such as graders); bulldozers and off-highway trucks; and separately sold replacement parts and additional attachments. Excluded from the scope of the study are certain products sometimes considered to be construction equipment, including aerial work platforms, dredging machinery, log splitters, fork-lift trucks and pile driving equipment. Also excluded is used construction machinery of all types.
Markets for construction machinery covered by this study include residential building, nonresidential building and nonbuilding construction. In addition, major construction machinery producers active in China are identified and profiled, and the key competitive variables for this industry are discussed. The entire report is framed within the Chinese construction machinery industry’s economic and market environments, and therefore environmental variables affecting construction machinery production and demand in the country (such as government plans and regulations and construction expenditures) are emphasized. Construction machinery market share data by enterprise presented in the Industry Structure” section are estimated based on consultation with multiple sources.
This study also analyzes China’s construction machinery market by region (e.g., Central-North, Central-East and Southwest). The Special Administrative Regions of Hong Kong and Macau are excluded from the scope of the study. These regions remain to a great extent economically independent from the rest of China, even though they returned to the People’s Republic of China in the late 1990s. Taiwan, which is economically independent from the rest of China and not under the administration of the central government, is also excluded from the scope of this study.
Economic and demographic indicators presented in this study were obtained from The Freedonia Group Consensus Forecasts dated June 2011. A wide variety of primary and secondary sources were also used in the compilation of this report. These include Chinese government statistical sources (principally from the National Bureau of Statistics of China and the National Development and Reform Commission), the China Construction Machinery Association, the Organization for Economic Co-Operation and Development, the United Nations, the World Bank, industry experts, financial sources, and construction machinery manufacturers and distributors.
In addition, data and background information were obtained from various news and trade publications, including Architectural Record, China Construction News, China Daily, People’s Daily, The China Business Review, Construction Machinery Digest, and Construction Machinery Magazine. Corporate annual reports, product literature and other company information were also used in framing the industry and market environments and as input for market size assessments.
Statistics from various sources were carefully examined during the preparation of this study, and contradictions and discrepancies among data sources were noted. The accuracy and reliability of figures from each source were evaluated, and adjustments were made where deemed necessary. This was done in order to arrive at a consistent set of industry statistics, which are based on the best available information at the time this study was published. As a result, the data presented here may differ, sometimes substantially, from figures issued by official government sources. Tabular details may not always add to totals due to rounding.