At the end of November, the Shanghai New International Expo Center was crowded with people. my country's largest construction machinery professional exhibition-the Shanghai BMW Construction Machinery Exhibition, held every two years, is being held. The outdoor exhibition area covering an area of 100,000 square meters was filled with construction machinery of various brands, and major domestic and foreign manufacturers such as Sany, XCMG, Komatsu, and Doosan all appeared. In the exhibition area, the buyers and sellers shuttled between the tall and tall tower cranes looking for business opportunities, and the audience gathered in front of the booth with launch events, applauding the product highlights from time to time.

According to official data from the editor of domestic excavator parts, the 2018 Shanghai Bauma Exhibition has invented the highest level in history in terms of exhibition area, number of exhibitors and number of visitors. In the meantime, the exhibition area exceeded 330,000 square meters, using the entire exhibition area of the Shanghai New International Expo Center. The number of exhibitors reached 3,350, an increase of 13% compared with the previous one. The total number of viewers reached 212,000, an increase of 25%.

      These eye-catching figures are in sharp contrast with the previous exhibition: In 2016, the Shanghai Bauma Exhibition saw a decline in the number of visitors for the first time. Leading domestic and foreign companies, including Komatsu, XGMA, Kobelco, and Liugong, were complicated due to cost problems. absence. At that time, my country's construction machinery industry experienced a five-year bleak, many small and medium-sized enterprises were shut down, and professional sales have entered a negative increase since 2014. In the mouths of some professionals, this downward cycle that began in April 2011 is called the "cliff decline."

      However, judging from the construction machinery occupation development data in the past two years, the severe winter has now ended. According to the data of the National Bureau of Computing, the domestic excavator parts editor showed that from January to September 2018, the country's cumulative production of excavators and loaders was 194,153 and 108,324, an increase of 51.7% and 26% year-on-year respectively. Nowadays, the more important issue in the profession is whether this round of rapid development will reproduce the glorious scene of the construction machinery market between 2009 and 2011.

      Parting the severe winter: infrastructure to make up for shortcomings and superimpose equipment renewal period

      As the upstream industry of the construction industry, the prosperity of the construction machinery industry depends on the newly-started area and operating rate, and is further affected by the investment in fixed assets under the macro environment. From 2008 to 2011, the impact of the "Four Trillion Plan" brought about a wave of infrastructure and real estate construction. During these three years, the annual growth rate of national construction machinery sales remained above 30%, and the growth rate reached its peak in 2011 of 41.3%. Afterwards, as the "Four Trillion Plan" came to an end, the gradually weakening demand side was unable to digest the inventory of engineering equipment, and the beginning of the profession turned from prosperity to decline, starting in April 2011 and entering a downward period.

“2014 and 2015 were two difficult years for the global construction profession. At that time, Caterpillar’s affairs fell by 25% in these two years, and 2017 and 2018 have improved. In the past 18 years, Within a month, there has been an increase of about 50%.” Caterpillar Group President Thomas Pellette, who is in charge of infrastructure construction affairs, told the media. Founded in 1925, Caterpillar is headquartered in Illinois, USA. Its main business is heavy industrial equipment including construction machinery, mining equipment, and gas engines. According to the financial report, Caterpillar’s revenue in the third quarter of this year was US$13.5 billion, an increase of 15.5% year-on-year. According to Bloomberg data, the editor of domestic excavator parts shows that Caterpillar's construction machinery business revenue reached 19.13 billion US dollars in 2017, ranking first in the world.

      In my country, Caterpillar is one of the foreign-funded enterprises with the highest market share of construction machinery. According to Chen Qihua, Chairman of Caterpillar (my country) Investment Co., Ltd., who is in charge of my country's shopping malls, Caterpillar's rapid increase in my country's shopping malls this year mainly comes from the replacement of stock machinery. The scale of this part is larger than that of new machines sold. high. "In addition, our government has also continued to invest in infrastructure construction to promote stable economic growth." He added, "We see this policy as a driving force for the entire profession."

      Since the beginning of this year, infrastructure investment has increased steadily, and the growth rate has fallen. In this context, making up for shortcomings in infrastructure was put on the policy agenda in the second half of this year. At the end of July, when the Politburo of the CPC Central Committee held a meeting to arrange the work for the second half of the year, it clearly proposed to increase the strength of the infrastructure to make up for the shortcomings. In November, the General Office of the State Council issued the "Guiding Opinions on Adhering to the Intensity of Sustaining Shortcomings in Infrastructure Category", requiring efforts to complement railways, highways, water transportation, airports, water conservancy, energy, agriculture and rural areas, ecological and environmental protection, public services, urban and rural infrastructure Shortcomings in areas such as the renovation of shantytowns, and accelerate the promotion of major projects that have been included in the plan. According to data from the National Bureau of Computing, infrastructure investment from January to October this year increased by 3.7% year-on-year, during which the road transportation industry increased by 10.1%.

      At the Bauma Exhibition, a salesperson from John Deere, who is resident in a Shandong shopping mall, stated that with the continuous promotion of large-scale projects represented by the expansion of Shandong Weiri Expressway and Jiqing Expressway, the demand for Shandong construction machinery has surged. During the period, the sales of the most representative excavator rose to the top of the country. He stated, "The primary source of the increase in sales of construction machinery this year is the old customers, and their engineering volume is also increasing. Some old machines will be replaced with new ones if the power cannot keep up. The original one can be increased to two or three. "

      As a representative of the American excavator, John Deere entered the Chinese market very late compared with Caterpillar. Caterpillar has established a joint venture with XCMG since the 1990s, and the wholly-owned plant built by John Deere in Tianjin did not go into production until 2012, which coincided with the downturn of the construction machinery industry. However, at the annual meeting of the excavation machinery occupation held on November 14, John Deere released data that showed that the sales of excavators of the brand increased by 246% in the first 10 months of this year, which was significantly ahead of the professional average of 51.7. %.

      Be cautious: the vision of the policy is not clear, and the professional barriers have been established

      According to Melker Jernberg, President of Volvo CE, it is estimated that the sales growth rate in my country's shopping malls this year will be about 30%, and next year it will be -10% to 0%. He emphasized that a major feature of the construction machinery market is its strong volatility. Now my country's total market has reached a very high level. Even if the growth rate slows down or even shows a negative increase, it is a very healthy market.

      According to Bloomberg data, the editor of domestic excavator parts shows that the sales of Volvo construction equipment reached 7.79 billion US dollars in 2017, ranking fourth in the world. Jernberg stated that my country's shopping malls have increased rapidly in recent years, accounting for about 20% of Volvo's global shopping malls.

      Two Caterpillar executives did not disclose the specific figures for the future market forecast at the press conference. Chen Qihua stated that Caterpillar's judgment of my country's shopping malls has been satisfactory in the long term, and the entire market in my country is still very large. Peng Tangmou stated that he believes that my country’s future growth will be very stable. “Considering the investment and efforts made by the Chinese government in infrastructure construction, my country is definitely a very important market for us.”

      When asked whether my country's shopping malls will return to the level of 2009-2011, the sales staff of the aforementioned John Deere Company shook their heads repeatedly, "It's much worse than around 2010, almost at the level of around 2007." (Market performance) It’s okay now, but how long it can last and whether the country has a policy change, I dare not say.” He stated.

      Although the huge potential of my country's shopping malls is the same in the profession, after more than 20 years of open competition, this door of opportunity has begun to slowly close. The five years of career cliff-like decline are nothing more than a reshuffle, screening out some small and medium-sized enterprises with weak anti-risk ability, and the remaining market share has a tendency to gather in top enterprises. According to "my country Economic Weekly", as of October 2016, the number of excavator manufacturers nationwide has dropped from more than 110 at the peak to more than 20. According to the latest release of the "2018 my country Excavation Machinery Occupation Research Report", from January to October 2018, the sales of the top ten domestic enterprises in the shopping malls were 132,879 units, and the market share reached 85.3%. The figure for 2017 was 75.35%. Stories of "latency" like John Deere are increasingly difficult to replicate on newcomers.

In the outdoor exhibition area of Bauma, the booth of H?DROMEK is a small house of about 30 square meters. Two or three white painted excavators and loaders are parked on the open space outside the door. Among the exhibits with yellow as the main color, the planning of Heidem?ck's products is somewhat refined, but it is not eye-catching compared to the Liebherr excavator array a few meters away. Established in 1978, Heidem?ck is now the largest construction equipment company in Turkey. Its excavator and loaders sales have ranked first in the country for many years. According to its sales staff, Heidemerck's operating income ranks among the top 50 global construction machinery companies. In the past 40 years, its products have been sold to more than 100 countries, with major shopping malls gathering in Europe and North America.

      In 2017, the editor of domestic excavator parts saw the opportunity for the recovery of my country's market, and Heidemerck decided to enter the market. However, the development of this European construction equipment manufacturer has not been smooth in my country. It is reported that since the beginning of this year, only about 10 units of Heidem?ck's products have been sold in my country, and the market share is negligible. In this regard, the sales staff stated that Heidemerck's product positioning is high-quality and high-priced, and he is determined about the depth of my country's shopping malls and is optimistic about the future development. However, when asked whether he would open a subsidiary in my country, the salesperson clearly stated his negative. According to him, Haidmerk's factory in Thailand has been officially put into production in recent years, which is one of the reasons why the company decided to enter the Chinese market. In addition, Heidemeck has also set up an office in Japan to be responsible for the operation and post-market services of Asian stores. At the Bauma Exhibition, some Chinese dealers were recruited by Heidem?ck's booth, hoping to negotiate cooperation matters, but because Heidem?k did not hire employees who could understand Chinese, the two sides had to give up in the end.

      Put down your body: foreign manufacturers make efforts to provide aftermarket services, and explore low-end and mid-range shopping malls

      Chen Qihua stated at the press conference that my country’s construction machinery industry has experienced rapid growth for two and a half years, and all players are now considering how to achieve sustainable growth. “We also insist on paying close attention to this.” From the perspective of the new product releases at the Bauma Expo, low energy consumption and intelligent engineering equipment are the two future development directions that first-tier manufacturers have been vigorously increasing.

      In terms of low energy consumption, Caterpillar launched 11 new excavators at Bauma. In the meantime, the body weight of five products including 330GC ranged from 30 tons to 45 tons, which belonged to the "big dig". According to reports, this series of excavators uses smart weighing and other skills, which can increase operating power by up to 45% and save up to 15% in fuel consumption.

Volvo Construction Equipment launched an electrification field operation project in collaboration with Swedish customers, government, and universities in 2015. The project electrified the transportation link of quarrying operations, including the intermediate transportation link from excavation to initial destruction and then to secondary destruction. Since the start of operation in the second half of 2018, the project has been more effective than expected. According to Jernberg, the project's carbon dioxide emissions have been reduced by 98%, electricity consumption has been reduced by 70%, overall operating costs have dropped by 40%, and overall costs have been estimated to drop by 25%. "In the past practice, increasing environmental protection efforts often means dedicating cost and power. Volvo's electrified field operation project proves that we can take into account safety, environmental protection and power at the same time without having to make trade-offs." Jernberg said.

      Schematic diagram of Volvo Construction Equipment's "Zero Emission" operation project

      In terms of intelligence, according to Chen Qihua, Caterpillar has completed the interconnection of 700,000 engineering equipment worldwide by the end of August, and the goal is to reach 870,000 units by the end of the year to complete the global interconnection. Chen Qihua stated that there is still a lot of room for the intelligentization of the construction machinery industry. "Calculations and reports based on relevant data. In the past 20 years, the globalization of the construction machinery industry has slowed down the level of automation and intelligence of the entire industrialization. Compared, the efficiency is low. There are many opportunities in this, which can reduce a lot of waste."

      Since the recovery of the construction machinery industry, domestic construction machinery manufacturers have been rapidly narrowing the gap with foreign manufacturers, both in terms of skills and market performance, and have even leading advantages in some areas. For example, the above-mentioned equipment interconnection skills have been put into practice among leading domestic manufacturers. Now, domestic construction machinery companies including XCMG, Sany, and Zoomlion have entered the industrial Internet and launched long-distance management software for users.

      In the exhibition hall of Zhongke Yungu Technology Co., Ltd., the data of the travel path, operation time, load capacity, energy consumption and other data of the engineering equipment of Zoomlion are all clear on the software interface. With application software, users can obtain these data from mobile phones or tablets, and then optimize the device management program. Judging from the figures on the big screen, the number of connected devices of Zoomlion is about 11,000.

      Sany Group, a private construction machinery company with the largest proportion of domestic shopping malls, exhibited a number of unmanned solutions at Bauma, including the use of VR glasses to cooperate with drones to control excavators and heavy cranes over long distances. In addition, the new product SY365 intelligent excavator released by Sany is dubbed the "AI excavator", with functions such as electronic fence, radar obstacle avoidance, one-key slope repair, leveling, active trenching, dumping, and loading.

      At the Bauma Exhibition, Sany displayed an excavator that can be operated remotely.

      According to data released by the my country Construction Machinery Industry Association, domestic brands have gradually occupied a leading position in shopping malls since 2011. In 2010, domestic brands accounted for 29.4% of all types of construction machinery products. By 2016, it had risen to 46%. In terms of excavator, the most important product line, domestic brands accounted for 54% of the total sales of domestic shopping malls in the first seven months of this year.

      Facing the fierce market competition, foreign manufacturers urgently need to develop new advantages. In the past impression, foreign manufacturers have an absolute advantage in large-tonnage equipment, while domestic manufacturers are good at low-end product lines and focus on price advantages. But at this Bauma Exhibition, Caterpillar released six mini-digging products, and Volvo released the EC75D small-tonnage excavator planned, developed, and produced by the Chinese team. This effort to expand the middle and low-end shopping malls is estimated to have an impact on domestic brands in the price range.

      On the other hand, foreign manufacturers are also strengthening post-market services to improve user experience. Volvo Construction Equipment launched the "Wo+" overall solution at this BMW Show. In addition to monitoring the equipment's normal operating time, fuel power, production rate and other data, it also provides certification innovation, finance, accessories, and rental equivalent services. Jernberg stated that the requirements of Chinese customers regarding the running time of the machine are getting higher and higher, and the Chinese market is changing from a simple market to a mature one.

Caterpillar also launched a new generation of parts brand Yellowmark. According to its official article, Yellowmark aims to provide economical and reliable parts solutions, designed for one-time use and cannot be reused or remanufactured, so the price is lower. In addition, Caterpillar put forward the "2-hour response service promise" at the Bauma Exhibition: Within 50 kilometers, within 2 hours, Caterpillar's agents will promptly respond to any customer's demand for product equipment services.

      The editor of domestic excavator parts quoted Chen Qihua’s speech: “This is our new promise: No matter where the customer is, no matter what the customer’s needs, Caterpillar and our agents will provide our customers with timely, efficient, Excellent service."

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