At present, about half of global demand for construction machinery and equipment comes from China. In China, the first company in the construction machinery industry to reach the 100 billion yuan scale is Xuzhou Construction Machinery Group (XCMG), headquartered in Jiangsu, an eastern province. The company's main operating indicators have ranked first in China's construction machinery industry for 24 consecutive years. It is not only a strong competitor to Caterpillar in the Chinese market, but has also joined the top five in the global construction machinery industry on the strength of its high-quality products.

　　In fact, XCMG formed a joint venture with Caterpillar in 1994 to produce excavators, ended the cooperation in 2008, and began independently producing XCMG-brand excavators. In terms of sales scale, XCMG sold 8,000 excavators last year, a scale comparable to Caterpillar's. On this point, Yu Aijun, head of the excavator business division, said: "Excavators present a situation of international competition in the domestic market. All global construction machinery giants produce excavators in China. Although we are a domestic enterprise, we directly face international competition. For example, the world's leading construction machinery companies—Caterpillar of the United States and Komatsu of Japan—all produce excavators in China. Compared with them, our advantage lies in cost performance. XCMG (excavators) are positioned as mid-to-high-end products. Many users consider cost performance, (and) believe XCMG products are of good quality, reasonably priced, and can meet construction requirements, so they buy XCMG. After all, as XCMG, we have a short history, and compared with international giants, there is still a gap in strength. This is a relatively objective assessment."

　　XCMG Group put a new excavator production base into use at the beginning of this year. The base is extremely large, and its process design is very rational. From logistics and transfer to finished vehicle delivery, it can minimize workers' walking time and achieve the fastest logistics transfer process. The base's production capacity is designed for 20,000 units, with models ranging from 1.5 tons to 130 tons. Excavators of various tonnages that have rolled off the line are lined up outside the plant, a rather spectacular sight. Among them, 20-ton and 6-8-ton small and medium-sized excavators are mainly exported to South America, Southeast Asia, the Middle East, Africa and other countries and regions.

　　Unexpectedly, in the huge workshop of the excavator production base, only a few workers are busy operating. Ms. Jiang Nan, a person in charge at Xuzhou Construction Machinery Group Import & Export Co., Ltd., revealed: "The current development trend of the industrial machinery manufacturing industry is to replace previous manual labor with automation. The current direction of technological transformation is to use CNC assembly line operations to reduce manual input as much as possible. Equipment uses modern operating machines, such as welding robots, CNC machining equipment, and assembly line design. Today's assembly lines are similar to the production concept of family cars: from the input of parts to the final finished vehicle, everything is completed in one workshop."

　　XCMG's excavator production technology is independently developed, and core components other than engines and hydraulic parts are also produced in-house. As user requirements become increasingly high, XCMG has also begun considering manufacturing new excavators powered by gas rather than diesel, which can better save energy and reduce consumption.

　　Excavators are only the "tip of the iceberg." XCMG has the longest and broadest product chain among enterprises in the same industry worldwide. Its history can be traced back 70 years to the period of the Chinese People's War of Resistance Against Japanese Aggression and the World People's Anti-Fascist War. This construction machinery manufacturing enterprise, formerly the Eighth Arsenal of the Eighth Route Army of the Communist Party of China in southern Shandong, produced China's first truck crane and road roller in the 1960s; today, its five pillar industries produce a full range of construction machinery products.

　　In recent years, against the backdrop of a sluggish global economy, XCMG has achieved a "triple jump" in international development, and the number of its foreign employees has exceeded 4,000. The first jump is products: annual exports of 10,000 host machines to 167 countries and regions, with market share steadily among the top three in Brazil, Russia, Australia, Central Asia, the Middle East and other places. The second jump is enterprises: a US$200 million base in Brazil has been put into production, six overseas assembly plants in Eastern Europe, the Middle East, India and elsewhere are under construction, and Sino-foreign joint ventures are being established with first-class companies in Germany and the United States. The third jump is integrating global industrial resources: laying out R&D centers in Germany, the United States and Brazil, and acquiring European companies such as Germany's Schwing, a global leader in concrete machinery.

　　The acquisition of Schwing took more than a year of negotiations alone, was completed last year, and the two sides are now integrating. Speaking of international acquisitions, Wang Yansong admitted frankly that this is not simply replicating branch offices; it tests the group's overall operational capability and its ability to cope with cultural differences. He now often sits in front of a computer for hours communicating with the German side by email. He said: "First, they recognize XCMG's culture, and then everyone cooperates. Their dominant values are technology, products, quality, sales and service. We regard these as basic things, and they think that is enough. Today's sales are multidimensional: capital competition, brand competition, channel competition, advertising and promotion, financial services, financial leasing... the full set. Today's marketing is integrated. In many countries, users do not have cash when buying things; you have to help (customers) with loans, financing, and provide a full set of solutions."

　　XCMG's assembly plant in Poland, Eastern Europe, was also completed and put into production in 2007. The plant uses Chinese technology and localizes sales, service and some spare parts, radiating from Poland as a center to Romania, the Czech Republic, Lithuania, Latvia and even Belgium. On this point, Zhang Jingming, manager in charge of the Eastern European market at Xuzhou Construction Machinery Group Import & Export Co., Ltd., introduced: "For Polish products, our knocked-down parts are shipped over in containers, and some parts are purchased locally. The main thing is to slightly improve our products, especially their appearance, (because) the performance of Chinese products is not bad, but for appearance, European and American standards are quite strict, (so) after painting, equipment details and electrical improvements, the products are made suitable for the European market, and through Poland the products are sold to Germany."

　　As the largest enterprise in China's construction machinery industry, with the most complete product varieties and series and the greatest competitiveness and influence, XCMG Group is forming innovation-driven capacity through the deep integration of industrialization and informatization, and has always maintained annual R&D investment at more than 5% of sales revenue. In the next five years, XCMG's goal is to raise its ranking in the world construction machinery industry from fifth to third.