Chinese equipment market fell -12% in first half

A total of 77,250 construction machines were sold in the first six months of the year, compared to 88,000 units in the first half of 2015. There was a rise in sales of road building equipment on the back of new government investment in infrastructure. This saw 5,500 pieces of compaction equipment sold in the first half of the year, an 11% increase on 2015, while asphalt finisher demand was up 9% to 1,090 units. Dozer sales were also up, with an 11% rise to 1,950 units sold.

However, these gains were more than offset by a -11% drop in excavator sales, a -20% fall in mobile crane demand and a -21% decline in the wheeled loader market. Mini excavator sales were up 2%. However, sales of other types of equipment were down -14%.

The continued recession in the Chinese construction equipment industry is attributed to the large number of machines which are still active in the country following the stimulus spending boom of 2009 – 2011. In addition, the Chinese government is seeking to reduce capacity in a number of industries, including the coal and steel sectors. This has had a direct impact on demand for excavators and loaders, among other machines.

Off-Highway Research expects the Chinese market to fall -12% overall in 2016, with sales dropping to 120,450 units, from 136,534 for 2015. The forecast is then for a gentle recovery, with the market rising to 162,750 machines by 2020.

Emissions shift

The China III regulations have similar requirements to the European Stage IIIA and US Tier 3 laws for construction equipment, which came into force in those regions a decade ago. The increase in price of China III, compared to China II machines was an incentive to buy before the implementation date.

However, there are said to be some concerns over the reliability and performance of China III-compliant machines, as they have engines built to high tolerances, which may experience problems if powered by dirty or low-quality diesel. Off-Highway Research added that many of the ‘sales’ before the 1^st April deadline were in fact a transfer of equipment from manufacturers to their distribution channels, rather than genuine deliveries to end users.