However, several industry leaders said that low growth does not mean the construction machinery market has shrunk; rather, it is an opportunity for companies to strengthen their internal capabilities. During the reporter's “grassroots research,” companies also expressed agreement with this view. A survey questionnaire showed that nearly two-thirds of entrepreneurs are optimistic about the industry's future.

A Winter That Is Not Cold

Held concurrently with the summit was the 12th China International Construction Machinery, Building Material Machinery and Mining Machinery Exhibition (BICES). An exhibition service provider who has attended for many years told the Shanghai Securities News reporter that this year there were fewer exhibitors and the exhibition scale was smaller, and even companies that came did not organize many activities. “The signs of industry adjustment are very obvious.”

However, the winter of construction machinery does not seem cold. A dealer in North China said that, judging from industry trends, equipment operating hours in the industry have emerged from the sharp decline of the previous two years and are now stable year on year, or even slightly rising.

Zhan Chunxin's view also provides evidence for this not-so-cold winter. He believes that the industry contraction period is precisely a key period for companies to put their own house in order. Since the fourth quarter of 2012, Zoomlion has proactively adjusted its business strategy, shifting from pursuing scale growth as the core to pursuing business quality as the core. Its 2013 interim report showed that the dividends of Zoomlion's transformation had begun to materialize, with sales recovering in the second quarter and single-quarter operating revenue and net profit increasing by 138% and 290%, respectively; net cash flow from operating activities was 1.157 billion yuan, up 97.47% year on year.

A survey questionnaire of 67 construction machinery companies asked one question——can the industry emerge from the trough and return to an upward track within five years? The result was that 43 companies agreed, 24 of which were foreign-funded enterprises, with the proportion of optimists approaching two-thirds.

Dawn Appears in Niche Segments

Although the industry as a whole is still mired in stalled growth, leading enterprises are still maintaining growth. Besides Zoomlion, Anhui Heli is an example. A company manager at Anhui Heli told the reporter that the company is expected to maintain growth of around 20% in the third quarter, “and probably for the full year as well.”

The reason is that the downstream market for forklifts is the industrial market, which differs from the construction downstream market faced by excavators and loaders. In addition, in recent years the e-commerce wars have made downstream warehousing and logistics channel construction flourish, which has also fed back into forklift manufacturers.

Among them, sales of small forklifts are especially good. Pointing to the 3-ton-class forklift at the company's booth, the manager said, “Large forklifts demonstrate the company's strength, but small forklifts are more flexible to use and have broader demand, so they can win through volume.”

Road machinery is also less affected by downstream project investment. A staff member at Changlin Co. told the reporter that in recent years new rural construction has been relatively active, and the village-to-village road access and related road hardening projects have driven demand for road machinery. “Many places need low-grade roads built; when one place is finished, another begins. In addition, after roads are built, annual maintenance is also a considerable workload. Moreover, investment in previous years was not overheated, so the downstream of road machinery is steady but not explosive, very different from general equipment such as excavators and loaders.”

Similar is the truck-mounted crane. Data show that one in five trucks abroad leaves the factory with a crane, while in China only one in a hundred does. Luo Baihui, chief analyst at Jinmo Machinery Network, said, “Construction machinery companies should pay more attention to niche demand in urbanization and the trend toward greater mechanization.”