China's construction equipment industry is exploring several ways to boost sales in key areas amid projections of a stronger global economy. Many are focusing their efforts on India, South America, Africa and Eastern Europe, which are currently the primary destinations of exports.
The four markets account for about 70 percent of shipments. Suppliers have actually seen revenue from these geographic targets increasing since November last year and for some, the number of inquiries began rising in July.
For additional growth opportunities, a number of companies are looking closer to home for growth opportunities. At these enterprises, domestic demand now accounts for 50 percent of revenue compared with only 30 percent a year before. Sales within China has been on the upswing despite the financial crunch, thanks partly to the government's stimulus package.
To meet the requirements of different clients, makers are expanding their product mix. In this regard, several are adding crawler or track loaders to selections, as these can carry the same amount of material using less power than a wheel loader. A 50hp model of the former, for instance, has a capacity similar to that of an 80hp wheeled equipment.
Some enterprises are increasing their offerings by making minor adjustments in color and other specifications. This is evident in the cranes sector, where designs targeting Mexico are painted green and operate on 440V. Those for the Middle East have parts resistant to high temperatures, while Russia-bound units can withstand the cold.
Besides providing a wider range of products, suppliers are improving customer service. In line with this, several are even helping clients obtain loans for a purchase.
To minimize risk, companies investigate their buyers' credit standing via multiple channels. Some require a guarantee from the latter's bank.
In terms of pricing, manufacturers intend to keep quotes stable despite rising metal costs. A number, however, may adjust their rates if freight expense surges.
Aiming for greater differentiation, many enterprises are actively promoting their products and services using several media, including the Internet and trade shows. Some are setting up sales branches in their target markets.
China is home to about 1,000 construction equipment suppliers, including over 500 trading companies. In terms of ownership, 300 have state financing, 200 are foreign-invested and the rest are privately owned.
The industry is capable of turning out an estimated 70 million units annually. Jiangsu, Fujian, Hunan, Guangxi and Shandong provinces are the centers of production.
In Jiangsu, cranes, concrete equipment, bulldozers and compactors are the major lines. Xuzhou and Changzhou are the key hubs.
Fujian, with Xiamen as the manufacturing center, is strong in forklifts, loaders and concrete cutters. For Hunan, in particular Changsha, cranes are the main products.
Guangxi turns out loaders, roller machines and excavators. In Shandong, bulldozers, loaders and excavating equipment are the primary output.
Between January and August 2009, China shipped overseas nearly 9 million units of construction machinery, tools and related parts worth $5 billion. Among the major exports were loaders, cranes and concrete mixers.
Prices in the first category range from $1,500 to $50,000 per unit, depending primarily on the model's capacity and power. Designs from China are generally from 0.6 to 5 tons, while rated power reaches 50hp or more.
Crane trucks, the strongest line among cranes, start at $50,000 and can go up to over $3 million. Quotes are similarly based on capacity, which is typically between 8 to 1,000 tons.
Mixers, meanwhile, range from $5,800 to $300,000. Units can typically produce at least 25m3 per hour.This article "Construction equipment: Industry prepares for sales rebound" is originally posted in Global Sources.
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