China growth continues

The crane market in China continues to expand at an astonishing rate. Sales of truck mounted cranes, for example, reached around 14,000 units in 2006. The forecast for this year is up to 20,000 – more than 40% growth in just one year. Larger cranes are also now showing signs of significant increases in sales volumes. The 100 tonnes-plus sector, for example, almost doubled in 2006 and sales this year are also expected to be healthy.

It is a similar story in the crawler crane sector where this crane type is leading the way in terms of growth. Around 500 crawler cranes were sold in China in 2006 – more than double the number sold the year before. Crawler crane lifting capacities are also increasing. Prominent manufacturer Sany is reported to be developing a 1,600 tonne capacity crawler crane.

To give those unit figures some sort of financial perspective, it is estimated that crane industry revenues in China exceeded RMB 10 billion (US$ 1.3 billion) in 2006 – a 50% increase over 2005. According to official industry figures, crane industry revenue in the first half of 2007 reached RMB 7.9 billion, so the prospects for the full year look good.

With more than RMB 12 billion expected to flood into the crane sector this year, it is unsurprising that competition is healthy, to put it mildly. Having said that, the top four manufacturers in the mobile crane sector are estimated to account for between 80 and 90% of the market. The big four are; Xuzhou Heavy Machinery (part of XCMG), Zoomlion Puyuan, Sichuan Changjiang, and Taian Dongyue. Some estimates now suggest that Xuzhou Heavy Machinery has more than 50% of the market.

Export is also becoming a more widely-used word in China's crane industry. A number of Chinese construction equipment companies have already established either manufacturing, assembly, or distribution operations outside China and with manufacturing capacity in China at quite remarkable levels it is a trend that is likely to expand as domestic demand cools.

Over the whole construction equipment sector it is estimated that between 3 and 5% of equipment is exported. That figure will inevitably increase as the quality of the Chinese product continues to improve and various distribution and after sales support operations are put into place – especially if Chinese manufacturers can deliver certain products more quickly than their foreign counterparts.