Managing expectations

Speaking during October’s BICES construction equipment exhibition in Beijing, China, Off-Highway Research’s Beijing-based senior consultant Karin Sun warned that the slowdown in the market was not over.

The organisation forecast that unit sales of construction equipment could be -9% down this year, with only a modest +1% rise next year.

Ms Sun said a particular problem for dealers was the large number of used machines being repossessed from customers. Many of the larger dealers in China now have hundreds of low hours used machines available. “That is why rental has become such a hot topic for dealers,” she said.

The last 18 months have seen a significant fall in sales of new machines in China. Excavators and wheeled loaders alone make up around 80% of the market, but this year only about 85,000 are expected to be sold, compared to almost 160,000 in 2011.

Despite muted prospects for the market, some of the 1,500 manufacturers present at this year’s 12^th bi-annual BICES exhibition, which took place from 15 to 18 October at the Jiu Hua International Exhibition Center near Beijing, were cautiously optimistic.

Confidence

Liugong vice president David Beatenbough, for instance, was quietly confident about next year. “We forecast sales in China to increase +5% next year – it is definitely a recovery, but not a fast one,” he said.

“This is a cyclical industry, and we must remember that. We are working on improving the quality of our distribution network, concentrating on our service and support offering. Customers in China are changing, they are looking more and more at the whole life value of a machine.”

Others, however, expressed altogether more lacklustre expectations. Zoomlion, for instance, said it experienced a small fall in its revenues last year and that it expected a further decline in 2013.

Frank Zhang, senior president and general manager of Zoomlion’s international trading company, said the Chinese construction equipment market was still not good, “For next year, we believe the overall market situation will be quite stable – so we are not so optimistic.”

Meanwhile, Terex AWP said it has side-lined the scissor and boom lifts designed for the Chinese market that it launched at Bauma China last year.

The company’s 12 m Genie V1200 boom and 5 m push-around Genie PS500 scissor lift were introduced as a low cost alternative for the Chinese market with stripped back features.

But as Clint Weber, general manager at Terex Changzhou Machinery, explained, much has changed in the two year design period and it was discovered the Chinese customers would prefer machines from their existing lines.

“We have been evaluating what the market really wants. There is a need for speed and efficiency rather than downgraded products," Mr Weber said.

The company will now extend its existing range of booms and scissors at its subsidiary in Changzhou, China which are aimed at domestic customers and the wider Asia Pacific market.

New launches

As one of the two leading exhibitions for the Chinese construction equipment sector, BICES was also the scene of some significant machine launches.

In addition to the range of new products covered in iC’s preview of BICES (see September issue, and search online for “BICES”), further new machines were revealed at the exhibition.

Caterpillar, for instance, used the show as the launch pad for new ‘Built for China’ models. These included the 3.1 m³ class 950 GC wheeled loader, two new wheeled excavators – the 15 tonne class M315D2 and 17 tonne class M317D2 – as well as the 36 tonne class tracked 336D2 excavator and 22 tonne class 320D tracked excavator.

Key trends in the new launches include a robust and heavy-duty design and a focus on advanced hydraulics and fuel efficiency.

Meanwhile, Dingli launched its new 11.5 m working height AMWP81115 mast lift with jib at the show, destined for delivery to dealers in western Europe and Australia before the end of the year.

Sany introduced a new 21 tonne class SYT70 dozer, and Perkins unveiled a new off-highway diesel engine in the form of the meeting EU Stage IIIA / US Tier 3-compliant 1104D-E44 – the first production model designed and built at its Wuxi factory, China.

This is just a snapshot of some of the news and views from this year’s BICES exhibition, which attracted over 120,000 visitors and covered a record 210,000 m² of exhibition space. All eyes are now on what manufacturers will say and do at next year’s Bauma China show, which takes place from 25 to 28 November in Shanghai.