According to authoritative industry statistics (excluding export data), in April 2016, 29 major excavator manufacturers nationwide sold a total of 6,466 excavators (excluding wheeled excavators), a year-on-year decrease of 26.9% compared with 8,842 units in April 2015. Among them, mini excavators sold 2,315 units, down 23.4% year-on-year, and excavators above 6 tons sold 4,151 units, down 28.7% year-on-year.

Data released by the National Bureau of Statistics show that in the first quarter, GDP grew by 6.7%, reaching 15.86 trillion yuan. Among them, real estate development investment, which is closely related to the construction machinery industry, grew even faster, with a real increase of 9.1% after deducting price factors, reaching 1.77 trillion yuan. To some extent, this also drove the development of the construction machinery industry.

However, it is still too early to conclude that the construction machinery industry is recovering. The China Construction Machinery Market Index (CMI) released by the China Construction Machinery Industry Research Center for April was 87.66, with a year-on-year growth rate of negative 7.27% and a month-on-month growth rate of negative 35.67%. A CMI between 50 and 100 indicates that the market is relatively pessimistic and there may be a risk of decline.

In April, the China Manufacturing Purchasing Managers' Index (PMI) fell to 50.1 from 50.2 in March. Although the PMI is above the 50 boom-or-bust line, HSBC economist Ma Xiaoping said that the Chinese government is unlikely to introduce more stimulus measures, but will not tighten its accommodative policy either. Despite some signs of stabilization, the trend of China's economic slowdown will continue. Constrained by the global economic slowdown, the construction machinery industry is unlikely to show recovery in the short term.

In the first quarter of this year, the construction machinery industry rebounded somewhat, injecting confidence into the industry. As the second quarter passes its midpoint, the industry has again shown signs of weakness. Judging from the first-quarter reports of listed companies in the industry, although market sales have rebounded, performance remains in a downward channel. For example, in the first quarter, Sany Heavy Industry's operating revenue fell 16.91% year-on-year, Zoomlion's operating revenue fell 20%, and XCMG Machinery's fell 25.88%.

Since 2015, demand in China's construction machinery market has shown a declining trend, and it can be said that the industry has entered a cold wave period. Not only is it difficult to sell newly produced equipment, but for customers who have purchased new equipment, engineering projects have decreased, returns are low, and even payments for completed projects are difficult to recover. Therefore, experts predict that now and in the near future, the overall development situation of China's construction machinery industry will be very severe. At present, economic recovery in the United States and Europe has not achieved the expected results, so the construction machinery industry has had to enter a period of adjustment.

The government promotes industry development

The State Council Information Office held a press conference on April 28 to introduce the development of industry and communications in the first quarter. At the meeting, Huang Libin, deputy director of the Operation Monitoring and Coordination Bureau of the Ministry of Industry and Information Technology, introduced the progress of the five major projects. Huang Libin said that related work on "Made in China 2025" is currently being actively promoted.

The intelligent manufacturing project involves work in four aspects: First, implement a special action for intelligent manufacturing pilot demonstrations. In 2015, 46 pilot demonstration projects were identified, and in 2016 more than 60 pilot demonstration projects will be selected to form a number of replicable experiences and models. Second, jointly formulate and issue the "National Intelligent Manufacturing Standard System Construction Guide" with the Standardization Administration of China. Third, establish a China-Germany intelligent manufacturing standards cooperation mechanism. Fourth, jointly organize and implement special intelligent manufacturing projects with the Ministry of Finance to support comprehensive standardization experimental verification of intelligent manufacturing and the application of intelligent manufacturing models in key areas.

The industrial foundation strengthening project also involves work in two aspects: First, on the basis of 2013 to 2015, further implement the special action for industrial foundation strengthening and systematically promote the construction of "one center and three key links." Second, issue the "Guiding Opinions on Accelerating the Promotion of Industrial Foundation Strengthening," implement a package of breakthrough actions and integrated application plans, and improve the industrial technology public service platform.

The green manufacturing project involves work in two aspects: First, implement a special action for green manufacturing, including organizing and promoting the action plan for reducing high-risk pollutants, revising the catalogue of substitutes for toxic and harmful raw materials, and organizing recommendations for energy-saving electromechanical equipment products and evaluation of "Energy Efficiency Star" products. Second, announce the first batch of pilot units for extended producer responsibility for electrical and electronic products and pilot enterprises for green design of industrial products, and release national standards such as general principles and labels for green design product evaluation.

At present, enterprises in the construction machinery industry have achieved some results in transformation and upgrading, and the slogans of energy conservation, environmental protection, and green manufacturing have influenced many large and medium-sized domestic enterprises. For example, leading enterprises have accelerated their internationalization process, greatly improved core technology innovation capabilities through independent innovation and the acquisition of advanced foreign enterprises, and the number of patents has also continued to increase; achievements have been made in energy conservation and emission reduction, green manufacturing, and vibration and noise reduction, with mechanical energy consumption reduced by up to more than ten percentage points, and China has now mastered the core technologies in vibration and noise reduction; progress has been made in intelligent and information-based development; enterprises have begun to attach great importance to after-sales service to meet customer needs.

The aftermarket can continue to be deeply cultivated

The concept of the "aftermarket" was first proposed by American automobile companies. Its original meaning is that for every $1 of automobile sales, an $8 related service market is generated, including automobile parts supply, automobile modification, repair and maintenance, boutique beauty care, and in-car electronics. In short, the aftermarket refers to various services surrounding the use of a product after it is sold. The huge development space and "profit stimulus" are a "second" opportunity for construction machinery enterprises. The white-hot competition in the industry has made many construction machinery products increasingly homogeneous. The advantages at the product level are becoming less and less obvious, which has gradually highlighted the importance of product services.

Development of the construction machinery industry during the "12th Five-Year Plan" period: China's self-sufficiency rate for construction machinery rose from 82.7% at the end of the "11th Five-Year Plan" period to 92.6% in 2015. Last year, China's total construction machinery exports were estimated at $19.9 billion, nearly twice the $10.34 billion in 2010, and the aftermarket potential is huge.

The improvement of China's construction machinery industry is specifically reflected in substantive progress in the level of internationalization and a substantial improvement in the quality of global services; increased R&D investment and remarkable results in improving the construction of scientific research platforms; progress in the circular economy and green manufacturing; outstanding achievements in advantageous products, effective progress in information-based development, and the emergence of digital and intelligent manufacturing demonstration projects; rapid development of standardization work in the construction machinery industry; healthy development of talent training and corporate culture construction, and the promotion of social responsibility. Problems existing in industry development: the industry has entered a key stage of development and requires scientific and historical analysis of existing problems.

At present, the main problems facing the industry are rapid changes in market demand; serious structural overcapacity; aftermarket services and order need to be standardized, and related management systems need to be strengthened; the innovation system needs to be improved, and innovation capability needs to be enhanced; the reliability and durability of products need to be further improved; the pace of development of key components needs to be accelerated; there is still huge room for development in greening, user-friendliness, and intelligence; the competitiveness of large and ultra-large earthmoving machinery is insufficient; the demand for product technical performance in the four major strategic target markets of the "13th Five-Year Plan" is quietly changing; emerging markets urgently need to be developed; traditional markets are worth anticipating; the construction machinery aftermarket has huge potential; and the international market will continue to grow steadily.

In addition to services, the segmented market for customized and personalized needs in construction machinery will also be a key focus for enterprises to achieve breakthroughs. In the future, as construction machinery becomes more widespread in people's daily lives, working conditions will become more diverse, and customer needs will also vary. For example, mines and docks both need loaders, but their requirements are different. Similarly, the requirements for excavators used for planting trees and flowers in one's own garden are far different from those at construction sites. Customized services in segmented markets are still in their infancy in China, and future development prospects are promising.