Machinery / Industrial Parts & Tools

Foreword: my country's construction machinery industry is developing rapidly, seizing the market in the field of construction machinery, and its competitiveness is constantly improving; while the degree of process in the field of core parts and components still needs to be further improved, facing "the lack of high-end products, the homogeneity of middle and low-end products "The problem is that high-end hydraulic parts, high-end chassis, large-tonnage engines and other parts are imported in large quantities, facing constraints such as high prices, long cycles, and unstable supply. The comprehensive autonomy of construction machinery, especially the core parts and components, has become an important issue for the development of the industry. At the same time, due to the insufficient development of aftermarket services, the overall value chain of the industry is short, and the huge stock market value remains to be developed.

u3000u3000 1. The development status of my country's construction machinery

u3000u3000 1. Machine manufacturing is catching up

u3000u3000 In 2020, the total sales of TOP50 global construction machinery manufacturers will reach 197.251 billion US dollars. According to statistics from the Construction Machinery Association, after more than 30 years of development, my country's construction machinery ownership exceeds 10 million units. In 2020, the sales revenue of construction machinery will exceed 700 billion, ranking first in the world.

In the global ranking of TOP50 construction machinery manufacturers in 2020, Chinese manufacturers occupy 12 places. Among the top five in the world, 3 Chinese manufacturers are shortlisted, ranking 3rd in the world by XCMG, 4th in the world by SANY Heavy Industry and 4th in the world by Zoomlion. No. 5 in the world. In addition to the significant increase in the share of domestic brands, another characteristic of China's construction machinery market structure is the concentration of heads and the increase in market share of leading companies. The market share of the top four excavators has gradually increased from 37% to 60%. In 2020, the market share of Sany Heavy Industry and XCMG will be 28% and 16% respectively; in the field of truck cranes, the market share of CR3 has exceeded 80% in the past ten years. The market share has been further increased to over 90% in the past two years. In addition, in construction machinery, concrete machinery, loaders and bulldozers have all seen a development trend of gradual concentration of market shares to leading companies, and the market share of disadvantaged companies has been continuously compressed.

u3000u3000 Therefore, from the perspective of complete construction machinery manufacturing alone, domestic manufacturers already have the ability to compete on the same stage with leading foreign companies.

u3000u30002, high-end components are limited by people

u3000u3000 The degree of localization of key components is low, and there is a lot of room for substitution. In sharp contrast with the complete machine market, the key component suppliers of construction machinery are still dominated by foreign manufacturers.

u3000u3000 From the perspective of hydraulic systems, my country's hydraulic parts industry presents a coexistence of structural surplus of ordinary hydraulic parts, severe homogeneity competition of products, structural shortage of high-end hydraulic parts, and heavy dependence on imports. At present, the global hydraulic industry is highly concentrated. The global leading companies are concentrated in Japan, the United States and Germany, including Bosch Rexroth, Parker Hannifin, Eaton and Kawasaki. Their market share in 2020 will be 19.7%, 9.7%, and Kawasaki respectively. 7.2% and 5.7%, with a total market share of 42.3%.

u3000u3000In terms of hydraulic cylinders, the main foreign brands include Japanese KYB, South Korea’s Toyo Electric, and American Parker Hannifin. At present, Hengli Hydraulics has a domestic market share of 55%. In terms of hydraulic pump valves, the main foreign brands include Bosch Rexroth of Germany, Kawasaki Heavy Industries of Japan, David Brown of the United Kingdom, Eaton, Parker Hannifin of the United States, Kawasaki, Rexroth and other leading companies occupy a relatively high proportion of my country's excavator pump valve market. In terms of hydraulic motors, domestic excavator rotary motors are mainly foreign-invested KYB and Danfoss, domestic brand Zhonghengli realizes small-volume supply; domestic and foreign-owned mobile motors are mainly Nabtesco, and domestic manufacturers include Eddie Precision.

From the perspective of diesel engines, the global diesel engine manufacturing market is dominated by the Americas (mainly in North America), Europe, and East Asia (Japan and South Korea). The world’s well-known diesel engine companies are: American EMD Diesel Locomotive Company, American Caterpillar (CATERPILAR) Company, and the United States Cummins (Cummins), Germany Deutz (DEUTZ) Joint Stock Company, British Perkins (Perkins) Company, Germany MAN (MAN) Diesel Engine Company, Finland Wärtsilä (Wärtsilä) Company, Japan Mitsubishi (Mitsubishi) . Chinese diesel engines can meet domestic demand in the low- and mid-end market, but are temporarily unable to compare with leading foreign manufacturers in the high-end market. Domestic head diesel engine manufacturers include Weichai (17%), Yuchai (9%), and Yunnei Power ( 9%), Quanchai (7%), Xichai (6%), Futian Kangming (5%).

u3000u30003. Aftermarket services are in their infancy

In mature markets in Europe and the United States, two-thirds of the profits of construction machinery manufacturers come from aftermarket services. The domestic market is relatively backward in the field of construction machinery aftermarket services. According to the survey data of China Construction Machinery Industry Association, in 2020, the whole machine sales business will be contributed to agents The average 64% operating profit of the dealers and 36% of the aftermarket business profits, including the 19.9% average operating profit contributed by the accessory sales business to the agent group; the warranty service contributes an average 9.1% operating profit to the agent group; second-hand machinery Sales business is at a loss; operating leases contribute an average of 3.9% of the operating profit of the agent group; out-of-warranty services and other maintenance services contribute an average of 3.2% of the operating profit of the agent group; financial services and other businesses contribute to the agent group The group averages 0.9% of operating profit.

u3000u3000 At the same time, domestic construction machinery aftermarket service companies have a low operating level, and the aftermarket absorption rate (the ratio of aftermarket revenue to enterprise operating costs) is far lower than leading European and American companies. In the European and American markets, the aftermarket contribution of construction machinery agents accounts for 50% to 60% of the company’s turnover. The absorption rate of some outstanding agents has exceeded 100%. Even if they do not sell new equipment, these agents still Can survive, which gives the company a strong ability to resist risks. China has the world's largest possession of construction machinery and equipment, but the market absorption rate after agents is mainly hovering at a low level of 10-20%.

u3000u3000 2. The direction of industrial upgrading

u3000u3000 1. Focus on key technologies and improve the independent controllability of the industrial chain

In the construction machinery cluster area, promote leading enterprises and supporting enterprises to jointly overcome key technologies, support core technology research, continue to promote the autonomy of core components, and make every effort to make breakthroughs in high-end hydraulic components and hydraulic systems, power systems, power shift transmissions, and drives Independent research and development and manufacturing capabilities of key components such as bridges, controllers and sensors will improve the level of modular design and increase the controllability of the industrial chain.

u3000u3000 2. Promote the electrification of construction machinery

u3000u3000 Since the two sessions in 2021, carbon peaking and carbon neutrality have become key issues of concern to the whole society. In the context of the new round of industrial changes, the energy-saving and emission-reduction situation of construction machinery products is particularly severe. In 2020, the Ministry of Industry and Information Technology of the People's Republic of China issued the "Action Plan for Promoting the Electricity of Public Vehicles" to promote the electricization of construction machinery and accelerate the transformation of the construction machinery industry to new energy sources. With the increasingly strict environmental protection trend and the gradual advancement of more related policies, the electrification of construction machinery is in general trend. In the process of electrification, excavators and loaders in small products and large products will be the first to realize pure electrification in this market. Among them, the entry barrier for electrification technology of small products is low, and the sub-categories of large products that are suitable for application scenarios such as closed and fixed working environments such as ports and mines will also be the first to be electrified.

u3000u3000 3. Encourage the development of post-market services

As the market continues to saturate and the incremental space for construction machinery is limited, the overall growth rate of the industry will inevitably decline in the future. However, thanks to my country’s huge stock market, there will be huge service space for the future construction machinery market. In the life cycle, the ratio of the aftermarket repair and parts potential to the price of new equipment is almost 1:1. The current aftermarket scale of repair services and parts is hundreds of billions, and the second-hand equipment and rental market has reached a trillion scale. Facing the huge stock market, construction machinery companies must transform from a product-centric development model to a “product + service” direction, focusing on the development of industrial design, financial leasing, secondary sales, parts supply, and The key links of productive services such as energy-saving services, information services, logistics services, human resource management and training services, promote the extension of construction machinery to high value-added services.