Grasp the opportunity of “globalization + electrification” of domestic excavators.

As of July 2024, domestic excavator domestic sales totaled 59,600 units, up 6.23% year-on-year, realizing three consecutive months of positive cumulative sales growth and domestic sales recovery.

 

Excavators are mainly used in real estate, infrastructure, mining industry, agriculture, water conservancy and so on.

An excavator is an earth moving machine that digs materials with a bucket, which can be divided into oversized excavator, large excavator, medium excavator and small excavator according to the tonnage. Oversized excavators are particularly suitable for scenarios such as mining and rock crushing; medium and large sizes are commonly used in large infrastructure and real estate projects; and small excavators are more suitable for diversified small-scale tasks such as agriculture, horticulture, and small civil engineering projects, which have a wider range of applications due to their flexibility and multifunctionality.

 

 

 

Excavators have experienced two cycles, the industry is about to bottom out and recover.

The excavator industry has experienced two cycles since 2004:

(1) 2008-2015 the industry has gone through a complete cycle.
In 2008, the “four trillion” policy catalyst, quickly pulling the downstream excavator new demand, sales reached 173,700 units in 2011;

(2) The industry is in the second cycle in 2016-2024.
Infrastructure investment, old equipment renewal demand, national two national three switch, export enhancement and other diversified demand, driven by 2021 excavator sales reached 342,800 units; 2024 first half of the excavator sales fell 5.2% year-on-year, the rate of decline significantly narrowed, the industry is about to bottom out recovery.

 

 

Large-scale equipment renewal policy was introduced, the local implementation program to stimulate demand.

In order to stimulate domestic demand in the field of equipment for China's manufacturing industry, the Ministry of Housing and Urban-Rural Development issued the “implementation program to promote the renewal of construction and municipal infrastructure equipment,” requiring the renewal and elimination of the use of more than 10 years or more, high-pollution, high energy consumption, aging and wear and tear serious, technologically outdated building construction engineering machinery and equipment. The local implementation program actively cooperate, dozens of provinces and municipalities launched a large-scale equipment renewal implementation program, from financial support, old equipment exit mechanism and other aspects to accelerate the promotion of equipment renewal action, activate domestic demand to accelerate the industry rebound.

 

 

Domestic sales recovery and export improvement, excavator is expected to achieve positive sales during the year.

As of July 2024, domestic excavator domestic sales totaled 59,600 units, an increase of 6.23% year-on-year, to achieve three consecutive months of cumulative sales positive growth, domestic sales recovery. Domestic infrastructure investment continues to ensure the start of demand; at the same time, the policy of large-scale elimination of old equipment to stimulate downstream demand for renewal, domestic excavator sales stabilized and rebounded.

In terms of export, the total number of excavators exported in July was 57,262 units, down 12.3% year-on-year, the export rate of decline narrowed, accounting for 48.98% of total sales. Domestic enterprises are achieving globalization, overseas establishment of local production capacity, layout of overseas sales network, overseas into the accelerated period. We expect China's total sales of excavators to reach 209,300 units, 232,200 units and 281,700 units in 2024-2026, and sales will be realized within the year.

 

In recent years, domestic excavator manufacturers in the establishment of overseas local factories, expanding the influence of the overseas market; at the same time, the domestic manufacturers attach great importance to cost control, the construction of intelligent manufacturing plants, improve production efficiency. In terms of research and development, domestic manufacturers are deeply engaged in the field of new energy construction machinery, with the advantages of the industrial chain, and strive to enter the leading ranks in the world, a number of manufacturers are rising rapidly.

 

 

The electrification of construction machinery is accelerating.

Construction machinery is the main source of emissions from non-road machinery, of which excavators have the highest emissions, causing a significant impact on the environment. With China's emission standards, the state encourages the development of new energy construction machinery and equipment. Relying on the domestic three electric technology advantage, electrified forklift and loader after market recognition penetration rate increase. 2023 forklift electrification rate of 34.06%; 2024 first half of the loader electrification rate of 15.7%, construction machinery electrification transformation accelerated.