Disclaimer: this article was originally published by Sina Finance.
Source: https://finance.sina.com.cn/roll/2024-12-31/doc-inechsqf4108875.shtml
In 2024, the Chinese construction machinery industry experienced three significant accelerations: global expansion, intelligent automation, and greening. These developments have been supported by the leading companies’ continuous innovation and iteration, which have ultimately enhanced the global competitiveness of the entire sector.
Su Zimeng, President of the China Construction Machinery Industry Association, indicated that since 2024 the transformation of the construction machinery industry has been accelerating. The industry’s digital and intelligent upgrade has quickened, with green manufacturing, green products, and green construction advancing in an orderly manner.
The intelligent aspect of products has enhanced the overseas competitiveness of the industry. Three to four years ago, the revenue from overseas business of Chinese construction machinery enterprises only accounted for 10% to 20%. By the end of 2024, leading enterprises such as Shantui, Zoomlion, XCMG Machinery, and Sany Heavy Industry saw their overseas revenue shares approaching or even exceeding 50%. “I believe that in the coming years, it will continue to be a phase of accelerated ‘going global’ and continued increase in global market share for China’s construction machinery industry and top enterprises,” Wang Yongxiang, co-president of Zoomlion, told a reporter from Shanghai Securities News.
Dual Transformation of Intelligence and Data, Enhancing Quality and Efficiency
“Only by mastering internal competencies such as intelligent and digital transformation, can we achieve globalization and high-quality development. This is an overall transformation,” said Sun Changjun, Vice President of Zoomlion, in an interview with reporters, “In the past few years, we have focused on internal strengths, invested in promoting transformation and upgrades, focused on intelligent and digital transformation, created Zoomlion Smart Industry City, and gradually found the code for high-quality development.”
During the 2024 Bauma China expo in Shanghai, Zoomlion chartered flights to bring over 300 foreign customers from more than 30 countries to Changsha to visit the Zoomlion Smart Industry City. Foreign visitors marveled at the intelligent and digital capabilities that aren’t seen even in leading Western companies.
Now, all four major machine parks in the Zoomlion Smart Industry City are fully operational, achieving a comprehensive digital transformation and intelligent manufacturing upgrade for both main machines and components. In this “sensible and thoughtful” smart industrial city, with intelligent scheduling, industrial AI, digital twins, and full-process intelligent logistics, and other digital technologies deeply integrated with manufacturing, it is possible to produce an excavator every 6 minutes, a scissor lift every 7.5 minutes, a crane every 18 minutes, and a boom pump truck every 27 minutes.
Sun Changjun stated that the intelligent and digital technology and production lines of China’s construction machinery industry are already among the best in the world. “We are replicating the success of Zoomlion Smart Industry City in more locations.”
Intelligent and digital transformation has now become the “standard configuration” for the leading enterprises in China’s construction machinery industry.
As of June 2024, Sany Heavy Industry has completed and put into operation 33 lighthouse factories. The “Beijing Piling Machine Factory” and “Changsha No. 18 Factory” of Sany Heavy Industry have received “Lighthouse Factory” certifications, providing a referable direction for digitalization development to global manufacturing enterprises. At the same time, the company has successfully designed and built the first overseas “Lighthouse Factory” in Indonesia, achieving full network connectivity and minimal manning production.
In terms of digitalization, Sany Heavy Industry’s industrial internet platform has achieved real-time online access for 18,000 pieces of equipment and 51,000 cameras. Through data analysis and algorithmic models, the system optimizes to reduce costs and energy consumption, with energy-saving projects carried out during operations saving over 100 million yuan in energy costs annually.
Green Leadership, Venturing into High-End Markets
For the construction machinery industry in China, “green development is the fundamental tone of high-quality development and also a key to enter the high-end market.”
According to statistics from the China Construction Machinery Industry Association, electric construction machinery represented by electric loaders, forklifts, and elevating work platforms saw significant growth, with a cumulative sale of 5,114 electric loaders in the first half of 2024, a year-on-year increase of 361%.
Today, the electrification penetration rate of Zoomlion Smart Aerial Work Machinery Co., Ltd. (hereinafter referred to as “Zoomlion Smart Aerial”) has exceeded 90%.
It is precisely by seizing the two major transformation and upgrading opportunities of the aerial work machinery industry—focusing on lithium new energy and creating high-end products for arm-type aerial work machinery—that Zoomlion Smart Aerial has achieved leapfrog development and has become the sixth largest aerial work machinery manufacturer in the world.
Previously, aerial work machineries generally used lead-acid batteries, which required distilled water to be added once a month, with each battery having 16 water filling holes, making maintenance work a daunting task for downstream customers. “In the second year after the company was established, Zoomlion Smart Aerial took the lead in launching a lithium battery series of products, promoting the development and technological upgrading of new energy products in the industry,” said the person in charge of Zoomlion Smart Aerial.
XCMG Machinery stated that under the guidance of the national “dual carbon” strategy goals and the increasingly stringent environmental protection policies, the construction machinery industry is accelerating the pace of updating old and new products, gradually eliminating high-energy consumption and inefficient equipment, and vigorously developing pure electric and hybrid power and other new energy products.
In the first half of 2024, XCMG Machinery’s new energy products have entered a rapid growth lane, with revenue increasing by 26.76% year-on-year. Among them, the revenue from new energy loaders increased by nearly 2 times year-on-year, accounting for 23.3% of the total revenue, and the sales volume ranked first in the industry.
Zhejiang Dingli (63.370, -1.15, -1.78%) stated that in the future, the company will launch more new high-end products with independent intellectual property rights that have high added value, differentiation, electrification, and intelligence, further optimize product structure, and explore new growth engines.
The acceleration of intelligent and electric construction machinery industry has increased the overseas competitiveness of the industrial chain. These significant changes reflect the high-quality development of China’s advanced manufacturing is an irresistible trend.
A Surge in Global Expansion
In recent years, the scale and proportion of overseas revenue of China’s leading construction machinery enterprises have continued to increase significantly, and overseas income has gradually occupied half of the total revenue of these enterprises.
In the first three quarters of 2024, Zoomlion’s overseas revenue reached 17.644 billion yuan, a year-on-year increase of 35.42%, with the proportion rising to 51.31%. “Since 2024, the company has been planning and establishing more overseas new outlets, accelerating the development of the European and American markets, and completing multiple first-level outlet layouts. As of now, the company has over 5000 overseas employees, with a localization rate of about 90%, and has completed about 400 overseas outlet layouts,” said a representative from Zoomlion.
As disclosed, the international revenue of XCMG Machinery in the first three quarters of 2024 accounted for 46.7%, with its marketing network covering more than 190 countries and regions worldwide.
The China Construction Machinery Industry Association said that, according to the export value calculated in RMB, China’s construction machinery exports from January to November 2024 reached 339.829 billion yuan, a year-on-year increase of 8.63%.
Behind these encouraging figures, China’s construction machinery industry is undergoing three major qualitative changes.
Firstly, the overseas market of China’s construction machinery industry is leaping from Southeast Asia, South America, Africa, the Middle East, and other places to developed countries and regions such as Europe, America, Japan, and South Korea, gradually seizing the high-end market.
Zoomlion stated that in the first three quarters of 2024 the company achieved rapid growth in European and North American markets, achieving accelerated breakthroughs with customers in these markets.
Secondly, China’s construction machinery industry is gradually moving from exporting some products to exporting a full range of products.
“Selling a single construction machinery product overseas often requires more than a hundred details to be localized to meet the habits and regulations there. At present, only about half of China’s exported construction machinery products are abroad, with great potential for expansion into more categories,” said a representative of a construction machinery enterprise.
Lastly, leading manufacturers and their supply chains are increasingly choosing to “go overseas as a group,” creating research, manufacturing, and service chains for overseas operations, cultivating deep roots and achieving win-win situations with local markets.
“Key domestic companies are adjusting their global production plans and implementing localized strategies to accelerate their global layout. The expected continued growth in overseas market sales of domestic brands will be an important point of growth for the construction machinery industry in the future,” said a representative of XCMG Machinery.
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