Chinese demand to hit US$ 61 billion by 2015

By Helen Wright14 June 2012

Demand for construction machinery in China is forecast to increase +6.2% per year to reach CNY 387 billion (US$ 61 billion) by 2015, according to research company Freedonia.

But while this is a robust forecast, it is nevertheless a far cry from the +29% growth seen in the Chinese equipment market between 2005 and 2010.

Freedonia said the deceleration in growth was down to a moderating outlook for the economy in China as a whole, resulting in a slowdown in construction investment.

Nevertheless, infrastructure development is forecast to be the driving force behind construction sales for the five years to 2015.

Excavators and cranes are the most popular construction machines in China, and sales are expected to increase +6.2% annually between 2010 and 2015 to reach CNY 232 billion (US$ 36 billion).

This compares to growth of +38.5% between 2005 and 2010, when the market for this equipment jumped from CNY 33.7 billion (US$ 5.3 billion) to CNY 172 billion (US$ 27 billion).

Similarly, sales of loaders are expected to grow +5.9% year-on-year between 2010 and 2015 to reach CNY 71.5 billion (US$ 11 billion) - a slowdown compared to the +15.6% annual growth recorded between 2005 and 2010.

Sales of mixers and related equipment are expected to grow +6.2% per year in the five years to 2015 to reach CNY 30.5 billion (US$ 4.8 billion), compared to +26.4% annual growth between 2005 and 2010, while rollers and related equipment are forecast to grow +5.8% per year in the five years to 2015 to CNY 11.8 billion (US$ 1.8 billion), compared to +16.2% annual growth in the five years to 2010.

Freedonia also forecast a slowdown in sales of bulldozers and off-highway trucks, which are expected to see annual growth of +5.3% between 2010 and 2015, compared to annual growth of +16.2% between 2005 and 2010. This segment is expected to be worth CNY 9.6 billion (US$ 1.5 billion) by 2015.

Sales of parts and attachments, meanwhile, are forecast to increase +7% per year between 2010 and 2015, compared to annual growth of +32% between 2005 and 2010. Sales in this segment are expected to reach CNY 31.6 billion (US$ 4.9 billion) in 2015.

Sustainable growth

Freedonia said the Chinese government's 12th Five-Year Plan aimed to encourage domestic producers to upgrade their products and improve innovation in product development, so as to maintain sustainable growth.

"These technological improvements, coupled with pricing advantages due to relatively low production costs, will stimulate growth in shipments of all types of construction machinery by Chinese producers. As a result of such improvements, China will erase its trade deficit in construction machinery and become a net exporter," the report said.

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