Research Report on Construction Machinery Industry in China, 2011-2020

HUANGPU, China - March 4, 2016 - PRLog -- http://www.shcri.com/machinery/33253-research-report-on-construction-machinery-industry-in-china-2011-2020.html

It becomes an important market and the manufacturing center of construction machinery as the global production and demand transfer. Most of the global manufacturers of construction machinery entered China. And seized most of the market.

In 2015, China's GDP increased by 6.9% YOY. According to IMF, the growth rate of global economy was less than 3.5%. China's GDP per capita was approximately USD 8,000 in 2015, far behind that of developed countries. Therefore, Chinese economy still has great potential for growth.

The downstream of China construction machinery industry includes fixed asset investment, mining, export, etc.

In 2015, China's fixed asset investment reached CNY 55,159 billion, up by 10% YOY, which is one of the main drivers of China's GDP.

In 2015, The import value of construction machinery was USD 3.367 billion, down by 21.4% YOY. The export value was USD 18.978 billion, up by 4.11% YOY. The trade surplus was USD 15.611 billion, increasing by USD 105 million YOY. China imported construction machinery products from 88 countries in 2015. Among the origin countries, the import value of Japan, the U.S.A. and Germany accounted for over 50%. China's construction machinery products were exported to 214 countries and regions. The export value of the top 20 destination countries exceeded 60%.

Investment and  M&A remained major trend of the industry due to high expectation of market demand. It is noteworthy that Chinese manufacturers of construction machinery are expanding business overseas. Certain Chinese manufacturers with strong competitiveness expand export and operate internationally through M&A and joint ventures overseas. At the end of January 2016, Terex Corporation announced Zoomlion Heavy Industry Science & Technology Co., Ltd. had proposed tender offer. Zoomlion offered USD 3 per share with the total USD 3.3 billion to purchase Terex Corporation. After the news released, Zoomlion confirmed this case.

Current urbanization policies attempt to absorb surplus rural labors through synchronized development of small towns and medium to large-sized cities. The number of small towns is approximately 20,000 in China. It is estimated that new urbanization infrastructure will stimulate CNY 0.4-0.5 million for investment in fixed assets in the next 10 years. Decline of the governmental investment in fixed assets will make room for non-state-owned capital. The annual growth rate of investment in fixed assets like transportation, infrastructure and real estate is expected to surpass 10% in the coming years.

At the end of 2014, the urbanization rate was 54.8% in China. It is forecast that the urbanization rate will exceed 60% by 2020 and reach 70% by 2030, which will promote the development of infrastructure and construction machinery industry. In early 2016, Chongqing, Guangdong and Yunnan released "the 13th Five-year(2016-2020)" Transport Investment Plan. The investment scales are all over CNY 400 billion (USD 60 billion). Railway, Highway and urban rail transit are the main investment fields, which will promote China construction machinery industry.

From the development trend, the future revenue will largely come from after sale services including maintenance,  leasing and reproducing. Industry insider estimates, 30%-40% of the future sales revenue will source from parts reselling and 30%-40% will come from financial leasing. Only the rest will come from new product sales.

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