August Excavators: Reducing Resilience Difficult to Change

According to the survey data of China Construction Machinery Business Network, in August, China's excavator sales were 7,864 units, a year-on-year decrease of 11.10% and a year-on-year increase of 2.60%. This was also the fourth consecutive month of negative growth since May 2011. From January to August, 143,159 excavators were sold, a year-on-year increase of 25.01%.

â—† Weakness is hard to change and negative growth continues for four consecutive months.

Since cumulative sales exceeded 90% in February, reaching a high point, the monthly cumulative sales growth rate has continued to decline since then. Through the analysis of the downstream demand market, analysts at the China Construction Machinery Business Network believe that although the small sales of traditional sales will usher in September and October, this year's situation is more likely to be “not booming” and the cumulative sales growth will further decline. Market expectations for the next four months are still mainly bearish, with monthly sales exceeding 10,000 units.

â—† Strong export strength and shrinking domestic demand have prompted a rapid increase in the share of exports.

In August, the export sales volume was 381 units, an increase of 51.19% year-on-year, accounting for 4.84% of the total sales volume, becoming the highest share in January 2010 so far. From January to August, 2729 units were exported, a year-on-year increase of 54.71%.

Under the dual influence of strong export demand and shrinking domestic demand, the share of exports in total sales rebounded rapidly. Especially in June, the trend became more pronounced.

â—† Domestic brands are vulnerable to break through, and the market share has reached a new level.

Judging from the cumulative sales from January to August, 15 domestic excavator brands sold 53,991 excavators, with a market share of 38%, which was nearly 10% higher than that in 2010; represented by Komatsu and Hitachi Construction Machinery etc. The Japanese Excavator brand sold a total of 42,774 units, which fell from 35.39% of its market share in 2010 to the current 30%; Korean brands sold 28,144 units from January to August, with a market share of 19%, a 5.14 percentage point drop from 2010. Europe and the United States sold 18,250 units from January to August, accounting for 13% of the market share, slightly higher than the 2010 level.

â—† Railway construction has been slowed down in all directions, and downstream demand is hard to see.

On August 10, the State Council held an executive meeting to reorganize systematic safety assessments for railway construction projects that have been approved but have not yet commenced. In addition, the approval of new railway construction projects has been suspended. This news heralded the end of the "leap-forward" development model for China's high-speed trains that began in 1997.

From January to August, China’s investment in fixed assets rose by 25% year-on-year, down 0.4% from January to July. The growth rate of 25% of fixed asset investment has been refreshed since 2003.