The Economist: Sany Heavy Industry Excavator surpasses Japanese and South Korean competitors

Source: Overseas Network

Overseas Network, December 25 British magazine "The Economist" (The Economist) published an article entitled "Mining Victory" on December 21. According to the article, the *5660 construction equipment produced in China has reached the world's advanced level.
Excerpts from the full text are as follows:
Until now, it is widely believed that the construction equipment produced by Chinese companies - even the construction equipment produced in China by foreign *5660 companies - lags behind those produced by foreign companies in terms of quality and technology. However, new research from CLSA proves that this idea has long been outdated. The agency tested a series of Chinese-made excavators and found them to be durable and efficient. Sany Heavy Industry, Zoomlion, Liugong Machinery and other leading Chinese brands also have the advantage of low prices, and the construction equipment produced by these companies will soon occupy construction sites around the world.
Since the global financial crisis erupted five years ago, the situation has changed dramatically. Until then, nearly 90 percent of excavators on construction sites in China were foreign brands, even though they were generally made in China. In 2008-2009, the Chinese government implemented a huge fiscal stimulus, which led to a boom in the construction industry, which in turn encouraged Chinese machinery manufacturers to expand their scale, and a number of new companies entered the market. Although local Chinese companies are technically inferior to Japan's Hitachi and American Caterpillar in terms of product variety, Chinese companies offer very high discounts to buyers. By 2011, Chinese companies had accounted for half of the domestic market.
As the scale continues to expand, *5660 China companies can't wait to upgrade their technology. They have spent huge sums of money to acquire foreign competitors and suppliers, or have joined forces with foreign companies to form joint ventures. Sany Heavy Industry acquired two German companies, Putzmeister and Intermix; A joint venture has also been established with Palfinger in Austria. Zoomlion acquired CIFA in Italy. LiuGong and XCMG have formed joint ventures with Cummins in the United States and Doosan in South Korea, respectively, to improve their own diesel engines.
As the impact of the government's fiscal stimulus policy fades, China's demand for construction equipment is also declining. Foreign companies' factories in China, which used to produce low-tech "made in China, sold in China" products, are now transforming to produce high-end products for export. Its exports are mainly to Southeast Asian countries.
CLSA researchers conducted a two-week rigorous test of excavators produced by six companies in China, testing productivity, durability and fuel efficiency. The six companies are Sany Heavy Industries, Caterpillar, Hitachi, Doosan, and Japan's Komatsu and Kobelco. The performance of these excavators is very good, but the performance of Sany Heavy Industry excavators is extremely eye-catching. The Sany excavator may not be as good as the best excavator in the world made by Caterpillar, but it surpasses its competitors in Japan and South Korea. CLSA researchers have concluded that the technology gap between Chinese companies and foreign competitors is now "almost non-existent." CLSA expects Sany Heavy Industries and several other big Chinese brands to set off a wave of mergers and acquisitions in China's machinery manufacturing industry. At that time, the current 60 companies may be combined into six.
CLSA's findings stand in stark contrast to another survey earlier this year. In February, research firm Sanford C. Bernstein conducted teardown tests on two Chinese-made sedans to check their quality. These two cars are in the leading position among Chinese car brands. But the test results found that the gap between Chinese auto companies and foreign competitors is still wide. In this way, Chinese companies have not yet learned how to build the world's 5660 sedan, but they have now learned how to build the best quality construction equipment while still maintaining a price advantage – something that foreign competitors should be concerned about.