Having hit a low point of just over 1,000 unit sales in 2015, the Chinese motor grader market is on the way back up, according to specialist consultant Off-Highway Research’s latest analysis of the sector. However, the forecast is for the peak to be short-lived.
“The outlook for the domestic market largely depends on demand from major road projects, which account for over 90 per cent of sales and which have been major buyers of equipment over the last 12 months.
With declining sales in earlier years, the existing machine population has fallen well below current needs, so it is likely that demand will increase during the early years of the 13th Five-Year Plan period (2016-2020) when many new construction projects are started,” said Off-Highway Research’s report.
“However,” it continued, “It has become clear that the investment boom may not be sustained, and the macroeconomic policy has to return to the mitigation of financial leverage and the streamlining of the economic structure. Expressway projects will continue to reduce their share of total road investment, which will result in a decline in demand for motor graders in the future.”
Exports of motor graders from China already far out-weigh domestic demand, but it is telling that exports have fallen over the last two years.
“Given the limitations of the size of the domestic market, it will be vital to develop exports if the health of the industry is to be maintained. It also goes without saying that Chinese manufacturers will need to improve the quality and value of their machines… To do this they will need to improve the image of their machines through superior product quality and service, and they will also need to convince customers that the complete package on offer represents better value for them. However, with a large number of suppliers competing in a limited market, it will be very difficult indeed to raise prices to pay for the required improvements,” said the report.
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