In July 2017, the sales volume of excavators increased by 101.3% year-on-year, and there was no suspense for more than 100,000 units throughout the year

According to the statistics of the excavation machinery branch of the China Construction Machinery Industry Association, from January to July 2017, the 25 host manufacturers included in the statistics of the branch sold a total of 82,725 units of various excavation machinery products (including exports), a year-on-year increase of 101.3%, far exceeding the annual sales of last year (70,320 units). Among them, the domestic market (excluding Hong Kong, Macao and Taiwan, the same below) sold 77,814 units, a year-on-year increase of 111.7%, and the export sales volume was 4,884 units, a year-on-year increase of 14.0%.

In July 2017, a total of 7,656 units of various excavation machinery products were sold, a year-on-year increase of 108.9%, and sales decreased by 14.3% month-on-month due to seasonal effects. Among them, the domestic market sales volume was 6,993 units, a year-on-year increase of 126.0%, and the export market sales volume was 659 units, a year-on-year increase of 15.4%

Analysis of the sales changes in China's excavation machinery market in the past ten years found that the sales volume from January to July 2017 far exceeded the level of the same period in the past two years, and was close to the sales volume in the same period in 2012. Affected by factors such as the growth of market demand and the low base in the same period of 2016, the year-on-year increase in sales of China's excavation machinery market from January to July 2017 reached a record high. According to the seasonal characteristics of excavation machinery sales, the sales volume from January to July accounted for about 70% of the annual sales, and the annual sales volume in 2017 is expected to be 11~120,000 units, an increase of more than 50%. After selling less than 100,000 units for three consecutive years from 2014 to 2016, there is little suspense that sales will exceed the 100,000 mark again in 2017.

Figure 1 - China's excavation machinery market sales volume and year-on-year changes in the past ten years

Through the analysis of the sales of China's excavation machinery market in the past three years, it was found that China's excavation machinery market began to grow rapidly in the second half of 2016, with an increase of more than 70% for four consecutive months from September to December 2016, and a stronger growth momentum of the industry from January to July 2017, with an increase of more than 100%.

Figure 2 - 2015-2017 China's excavation machinery market sales volume and year-on-year changes

From January to July 2017, the sales volume of most enterprises increased significantly, especially the rapid growth of the sales volume of the industry's leading enterprises drove the overall growth of the industry, and seven of the top ten enterprises in the industry sales increased by more than 100%. The market share of Sany and XCMG continued to increase rapidly, of which the market share of XCMG has approached the 10% mark. Compared with the rapid expansion of leading enterprises, the sales volume of small and medium-sized enterprises in some industries has grown slowly, or even declined instead of rising, and the market concentration of the industry has been increasing.

2 Analysis of China's excavation machinery market

2.1 Brand Structure

From January to July 2017, the sales volume of domestic, Japanese, European, American and Korean enterprises were 42,377, 17,229, 14,142 and 8,977 units, respectively, with market shares of 51.2%, 20.8%, 17.1% and 10.9% respectively.

Figure 3 - The brand pattern of China's excavation machinery market from January to July 2017

Figure 4 - changes in the brand pattern of China's excavation machinery market in the past year

2.2 Product Structure

From January to July 2017, the sales volume of large, medium and small digging were 11,231, 20,489 and 51,005 units, respectively, with a market share of 13.6%, 24.8% and 61.7% respectively. Among them, the market share of mini excavation machinery with a tonnage of less than 6 tons has reached 19.5%. With the continuous improvement of the level of urbanization and the increase in the demand for machine substitution, the future market prospects of mini excavators are still optimistic.

Through the analysis of the changes in the product structure of China's excavation machinery market in the past year, it is found that the market share of small digging has fallen significantly after rising, and the market share of medium and large digging has rebounded. The impact of investment is more significant, and the market recovery driven by investment is also more reflected in the increase in sales volume and market share.

Figure 5 - Product structure of China's excavation machinery market from January to July 2017

Figure 6 - Changes in the product structure of China's excavation machinery market in the past year

2.3 Market Concentration

From January to July 2017, the market concentration CR4 = 52.8%, CR8 = 76.5%. With the market concentration from January to June is basically the same (the previous value CR4 = 52.8%, CR8 = 76.7%), and China's excavation machinery industry has entered a high market concentration industry. Judging from the changes in the concentration of China's excavation machinery market in the past year, the change trend of CR4 and CR8 has deviated to a certain extent, indicating that the market competitiveness of leading enterprises remains strong, and the market competition of enterprises outside the TOP4 is becoming more and more intense.

Figure 7 - China's excavation machinery market concentration from January to July 2017

Figure 8 - Changes in the concentration of China's excavation machinery market in the past year

3 Analysis of the export market of excavation machinery

From January to July 2017, a total of 4,884 excavation machinery were exported, accounting for 5.9% of the total sales, and the sales volume increased by 14.0% year-on-year. Sany, Caterpillar and Liugong occupy the top three export sales. The average tonnage of some domestic brand export products has exceeded 20 tons, indicating that the international competitiveness of domestic products is constantly improving.

Figure 9 - Product structure of China's excavation machinery export market from January to July 2017.

4 Analysis of the domestic excavation machinery market

4.1 Overview of the domestic market

From January to July 2017, the domestic excavation machinery market sold 77,814 units, a year-on-year increase of 111.7%. In terms of different regions, the sales volume in the western region is significantly higher than that in the east and the central region, but the increase is slightly lower than that in the central and eastern regions. East China, Southwest China and Central China occupy the main domestic market. North China and Northeast China have recovered significantly, benefiting from the recovery of steel, coal mining and other industries, the deepening of the Beijing-Tianjin-Hebei integration strategy, the infrastructure construction of the Tianjin National Games and the gradual implementation of the construction plan of Xiong'an New Area, etc., the growth trend of the excavation machinery market in North China and Northeast China has emerged.

Figure 10 - Sales volume and year-on-year changes of excavation machinery in different regions from January to July 2017 1

Figure 11 - Sales volume and year-on-year changes of excavation machinery in different regions from January to July 2017 2.

4.2 Brand pattern in the domestic market

From January to July 2017, the sales volume of domestic, Japanese, European, American and Korean enterprises were 38,797, 17,026, 13,014 and 8,977 units, respectively, with market shares of 49.9%, 21.9%, 16.7% and 11.5% respectively. Judging from the changes in the brand pattern of the domestic excavation machinery market in the past year, domestic brands occupy the main market, with a market share of about 50%, which has occupied half of the market. The market share of Japanese, European, American and Korean brands has decreased sequentially, and the market competition pattern is expected to remain stable in the future.

Figure 13 - Changes in the brand pattern of the domestic excavation machinery market in the past year.

4.3 Product structure in the domestic market

From January to July 2017, the domestic sales volume of large, medium and small digging were 10,652, 18,295 and 48,867 units, respectively, with market shares of 13.7%, 23.5% and 62.8% respectively. Less than 6 tons of mini excavators and 6~13 tonsMini excavatorsOccupying more than half of the domestic market share, the long-term development trend of small digging in the future is still worth optimizing.

Figure 14--Product structure of domestic excavation machinery market from January to July 2017.

Figure 15 - Changes in sales of different specifications in the domestic excavation machinery market from January to July 2017

Figure 16 - Changes in the product structure of the domestic excavation machinery market in the past year.

From the perspective of changes in the sales of products of different specifications, the sales of large digging, medium digging and small digging increased by 6651, 10572 and 23828 units respectively year-on-year, with a year-on-year increase of 166%, 137% and 95% respectively. The market outbreak is mainly driven by investment, the growth of mining and infrastructure construction demand drives the market demand for large excavation and medium digging, and the market demand for small excavation also continues to grow steadily under the condition of high base.

Judging from the changes in product structure in the past year, the market share of small digging has declined recently, and the market has rebounded in the medium and large digging, and the changes in product structure also reflect the recent changes in market demand.

4.4 Domestic market concentration

From January to July 2017, the domestic market concentration CR4=52.0% and CR8=76.4% were slightly lower than those from January to June (the previous value CR4=52.0%, CR8=76.7%). At present, the domestic excavation machinery industry is a high market concentration industry.

Figure 17 - Concentration of domestic excavation machinery market from January to July 2017.

From the perspective of different types of markets, due to the high technical threshold and market access barriers, the market is more occupied by European, American, Japanese and domestic leading enterprises, resulting in a higher concentration of the domestic large digging market than the medium and small digging market. The market concentration of medium and small digging is close to the overall market concentration, and the market competition is relatively more sufficient.

Figure 18 - Market concentration of different models in the domestic excavation machinery market from January to July 2017.

Judging from the changes in market concentration in the past year, the recent market concentration of CR4 has fluctuated slightly, and CR8 has shown a downward trend. It shows that the competitiveness of the leading enterprises in the industry (CR4) has an advantage, and with the continuous recovery of the market, the competition in the industry has intensified, and CR8 has maintained a slight decline in the past six months.

Figure 19 - Changes in the concentration of domestic excavation machinery market in the past year.

From January to July 2017, Sany's sales reached 16,031 units, and Caterpillar's sales volume reached 9,971 units, ranking 5,656 in domestic and international brand sales. XCMG's domestic market share has exceeded 10%, and it is the third host company with a market share of 10% after Sany and Caterpillar. From January to July 2017, the market share of the top four (eight) domestic sales companies increased by more than 100% year-on-year, and the growth of sales of leading enterprises brought about an increase in market concentration. However, the sales growth rate of some domestic small and medium-sized enterprises is small, and the gap between them and the leading enterprises in the industry has further widened, and the industry has been differentiated.

4.5 Domestic market distribution

From January to July 2017, the sales volume in Jiangsu Province exceeded 6,000 units, and the sales volume in Anhui and Shandong exceeded 5,000 units. Northeast China and North China were affected by the market rebound and low base and other factors, and the increase was significantly higher than that of other regions, and the market recovery was obvious. The sales volume and growth rate of Anhui Province are in the forefront of the country, and the follow-up market development trend needs to be paid attention to.

Figure 20 - Sales volume of each province in the domestic excavation machinery market from January to July 2017.

Figure 21 - year-on-year changes in sales volume of various provinces in the domestic excavation machinery market from January to July 2017

From January to July 2017, the top five provinces in terms of sales volume were: Inner Mongolia (890), Shandong (773), Sichuan (732), Guizhou (636) and Henan (549); The top five provinces in terms of sales volume are: Jiangsu (1700), Anhui (1464), Guizhou (1221), Shandong (1211) and Henan (1099); The top five provinces in terms of sales volume are: Jiangsu (4054), Anhui (3625), Shandong (3353), Sichuan (3185) and Henan (2907). The product structure of different provinces shows different characteristics.

Figure 22 - Large-scale digging sales volume in various provinces of the domestic excavation machinery market from January to July 2017.

Figure 23 - Digging sales volume in various provinces of the domestic excavation machinery market from January to July 2017.

Figure 24 - Sales volume of small digging in various provinces of the domestic excavation machinery market from January to July 2017.

4.6 Average operating hours

The average working hours is one of the important indicators to measure the construction demand of excavation machinery and judge the future development of the industry. According to experience, the break-even points of large digging, medium digging and small digging are: 2500~3000 hours/year, 2000~2500 hours/year, and 1500 hours/year. When construction demand exceeds the break-even point, market demand will increase significantly.

Fig.25 -- Changes in the average working hours and attendance rate of excavation machinery in the past year.

According to the survey statistics of the excavation machinery branch, the number of attendance hours of excavation machinery has increased slightly in the past year, and the equipment attendance rate has also stabilized at a high level.

5 Market Forecasts

In the first half of 2017, the excavation machinery market still maintained a rapid growth trend, and the high growth rate was not only related to the growth of market demand, but also affected by the low sales base in the first half of 2016. After the last round of market "turmoil", in the face of this market recovery, the development of the industry is more objective and rational. Affected by the superposition of multiple factors such as macroeconomic recovery, real estate investment growth, PPP project landing, replacement cycle, product inventory cycle, etc., the objective market environment has changed, and the growth trend is difficult to sustain for a long time.

At present, the country's regulation and control of real estate has been further strengthened, and the growth rate of real estate investment in June 2017 continued to decline to 5.5%, and the growth rate of real estate investment may continue to decline in the future, and will affect the future development of the excavation machinery market. As another important force driving the excavation machinery market, the growth rate of fixed asset investment has also declined, and may affect the downstream construction machinery market.

According to the development dynamics of the industry and the historical law, it is expected that the sales growth rate will fall in the second half of 2017, and there may be zero growth or even negative growth in some months. The annual sales trend is close to that in 2012 and 2013, and the annual sales of excavation machinery in 2017 are expected to be 11~120,000 units, an increase of more than 50% over 2016.

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