Due to multiple factors such as the cyclical downturn and the decline of the real estate market, the domestic construction machinery market is currently in a trough stage; in contrast, Chinese brands have shown strong growth momentum in overseas markets. According to customs data, in 2023, China's export value of complete construction machinery and parts reached 48.552 billion US dollars, a year-on-year increase of 9.6%, setting a new historical record.

Driven by overseas market business, the net profit growth rate of the construction machinery industry turned from negative to positive and began to enter a track of profit growth. Some core enterprises, such as XCMG, Sany Heavy Industry and Zoomlion, have continuously increased the proportion of overseas revenue and have long surpassed the recovery pace of the domestic market. These companies are gradually shifting from "product export" to "industrial globalization" and are exploring internationalization paths suitable for their own development. In addition to the traditional overseas expansion of Chinese enterprises and the agent model, many companies are also building their own global direct sales systems, among which Zoomlion is the most typical representative.

According to UK-based KHL data, in 2004, US companies occupied 44.9% of the global construction machinery market, Japanese companies accounted for 20%, while Chinese companies at that time had only a 2.7% market share. However, in recent years, XCMG, Sany Heavy Industry and Zoomlion have long remained on the global TOP15 list of construction machinery, and the overall share of China's construction machinery industry has consistently remained in the top three, once achieving the global ** position in 2020 and 2021. Through years of effort, combined with strong support from new technological innovations such as digitalization, intelligentization and greening, the overall competitiveness of China's construction machinery industry has greatly improved and is now capable of competing with European, American and Japanese enterprises. The industry's operating revenue also grew from 562.6 billion yuan in 2012 to 849 billion yuan in 2022. In recent years, going global has become a key development term. The export value of the construction machinery industry reached 44.3 billion US dollars in 2022, and in 2023 the export value continued to hit a new historical high, reaching 48.552 billion US dollars, a year-on-year increase of 9.59%.

After these achievements, we see the huge opportunities contained in the global market. At present, economic and infrastructure development across regions of the world is uneven. Developing countries in Asia, Africa and Latin America are in the early or rapid stages of industrialization and urbanization, with infrastructure construction in full swing. Meanwhile, developed regions such as Europe and the United States continue to develop steadily. Driven by strong demand, the global construction machinery market is continuously expanding. According to statistics, the global construction machinery market space is expected to exceed 150 billion US dollars in 2023, and is expected to exceed one trillion yuan in 2024.

As opportunities gradually emerge, Chinese enterprises are seizing the moment and actively accelerating the pace of overseas market expansion. In the "Belt and Road" regions, including the Middle East and Southeast Asia, Chinese brands are showing strong competitive momentum. In recent years, the Southeast Asian economy has continued to flourish, and large-scale infrastructure investment has shown long-term growth in demand for construction machinery. Driven by the "Belt and Road" initiative and relying on the improvement of their own brands and technological strength, domestic enterprises have already begun competing with leading overseas enterprises in this region. As the cost-effectiveness of products becomes increasingly prominent, Chinese brands are expected to become one of the dominant forces in the Southeast Asian market.

Moreover, compared horizontally with Sany Heavy Industry, XCMG and LiuGong, Zoomlion's gross profit margin on overseas revenue is the highest among leading OEMs. The reason is inseparable from the fact that, under its end-to-end direct sales system, Zoomlion has more precise control over end markets and places greater emphasis on profit levels, operational efficiency improvement and enhanced risk control capabilities.

In addition, compared with Sany Heavy Industry, XCMG and LiuGong, Zoomlion's gross profit margin on overseas revenue leads among major machinery manufacturers. Behind this result, it can be attributed to Zoomlion's precise grasp of end markets under the end-to-end direct sales system and its high emphasis on profit levels, operational efficiency improvement and risk control capabilities; these factors are inseparable.

After decades of development, the domestic construction machinery industry is no longer limited to simple trade exports but is moving toward deep cultivation of overseas markets. In areas such as cross-border mergers and acquisitions, overseas plant construction, global R&D, localized management, and international thinking and operating models, Chinese construction machinery enterprises have made remarkable progress. Under the new global industrial competition landscape, the internationalization path of Chinese construction machinery enterprises is no longer merely exporting products abroad but truly integrating into the international market. These enterprises carry out localized and customized R&D for different markets and expand the coverage of product lines. At the same time, facing the global trend of new energy, they continue to make efforts in electrification and intelligentization, develop new productive forces, lead overseas markets toward green development, and add important advantages for participating in global competition. Meanwhile, sales revenue in late-developing regions such as the European Union, North America, Latin America, Africa and India has grown rapidly, and the regional market structure has been further optimized, showing a successive growth trend of "the West is dim while the East is bright" and "the West slows while the East grows rapidly."

For all Chinese construction machinery enterprises, the different development paths they choose will bring sufficient opportunities. From thriving in the domestic market to tapping incremental opportunities in the global market, China's construction machinery industry has achieved a leap in quantity; from conducting cross-border mergers and acquisitions integration to deeply cultivating overseas markets, Chinese enterprises are on the path of qualitative upgrading.

For domestic construction machinery enterprises, in recent years, with the improvement of product strength, the mission of domestic substitution has been almost completed, so going overseas has become the inevitable next step. Due to the characteristics of construction machinery equipment, their target markets are mainly concentrated in developing countries rather than developed regions. In these markets, India, as a populous country, faces problems such as poor sanitation and congested roads, and its infrastructure construction urgently needs improvement, so it is considered likely to become the next important region for major infrastructure development.

In the fourth quarter of 2023, India's gross domestic product (GDP) grew by 8.4% year-on-year, exceeding the 8.1% in the third quarter. This growth is closely related to India's actions in infrastructure fields such as road paving, railway expansion and power grid upgrading. The Indian government and private sector have begun to feel the benefits brought by infrastructure construction, and this momentum is likely to continue. In the 2024 annual budget, the Indian government continues to allocate 134 billion US dollars to national infrastructure projects, which sufficiently shows the market space of India's infrastructure. This is also why domestic construction machinery enterprises almost must go to India when going overseas, and even regard it as the most important target direction.

However, in recent years, negative public opinion regarding the Indian market has been incessant, mainly involving issues such as the business environment, population quality and government credibility. In addition, geopolitical issues between China and India are even more severe than economic issues. Therefore, when entering the Indian market, domestic construction machinery enterprises must seriously consider how to balance risks and opportunities.

Overall, leading domestic construction machinery equipment enterprises have already carried out corresponding layouts and development plans in the Indian market.

Sany Heavy Industry has completed the construction of a localized production project in India and started production. To ensure that local assembly personnel can understand production technologies and processes, Sany Heavy Industry specially sent Indian employees to its factory in Loudi, Hunan for training, and also established an after-sales service mechanism.

XCMG has also invested in its layout in the Indian market, developed customized product combinations according to Indian construction conditions, and established management and manufacturing teams. According to official information, after XCMG established a factory in India, local sales have doubled, and it plans to build India into a manufacturing center for Southeast Asia and South Asia, deeply cultivating the Indian market while also expanding coverage of neighboring countries.

Official public data from Zoomlion shows that the company's sales in the Indian market have doubled every year over the past three years. The company's newly established main machine yard in Mumbai covers an area of more than 20,000 square meters and can meet the spot demand for various products in the Indian market. In addition, Zoomlion is also building an industrial park in India, and the ** phase of the project is expected to be completed and put into use this year.

It is worth noting that India is only one of the overseas strategies of these leading enterprises. In recent years, the overseas business of these enterprises has flourished.

Taking Sany Heavy Industry as an example, its interim report last year showed that the company's overseas sales revenue reached 22.5 billion, accounting for more than 50% of the company's total operating revenue, with business covering more than 180 countries and regions. XCMG's interim report last year showed that overseas sales revenue was 20.9 billion, covering 193 countries and regions worldwide. Zoomlion's annual report last year showed that overseas revenue was 17.9 billion, with markets covering more than 140 countries and regions worldwide.

Taking Sany Heavy Industry as an example, in the first half of last year, its sales in the Asia-Pacific region were the highest, reaching 8.938 billion yuan. It was followed by the European market, with sales of 8.182 billion in the first half of the year, then the Americas region, with sales of 3.958 billion. Finally, the African market, with sales of 1.388 billion.

Driven by the "Belt and Road" initiative, leading Chinese construction machinery enterprises have obvious advantages in most countries and regions along the "Belt and Road," and increasing their layout in the Indian market has also become a key step for China's construction machinery to go international.

In addition to the layout in India, a major global construction machinery market, from a global perspective, although Sany, Zoomlion and XCMG have grown rapidly in overseas business in recent years, there is still a certain gap compared with more mature international enterprises such as Caterpillar.

One obvious point is that the reason why China's construction machinery industry can vigorously develop overseas business is mainly that it relies on price advantages to aggressively enter markets. The strong service capabilities of domestic construction machinery manufacturers are equally crucial. Especially during the pandemic, when personnel movement was restricted, Chinese engineers were still able to stay abroad for long periods and respond to demand at any time, which foreign enterprises could not match. For large mechanical equipment, regular maintenance and operation are particularly important, and customers can obtain better services at lower costs. These are all key factors for the successful overseas expansion of domestic construction machinery enterprises.

However, it is very challenging to obtain sufficient profits while maintaining low prices and providing high-quality services. Under current circumstances, US, Japanese and European enterprises do not have advantages in price, and their main markets are developed regions. Even if Chinese machinery relies solely on cost-effectiveness advantages, it will be difficult to achieve breakthroughs in these developed country markets. Therefore, to stand out from international giants, it is necessary to strengthen price advantages and provide high-quality services, capture more markets globally, and bet on the next wave of infrastructure construction.

Although domestic construction machinery enterprises need to consider how to increase profits while expanding markets, so as to create greater value for employees, shareholders, management and society as a whole. After all, in this highly competitive era, leaders in any industry cannot focus only on struggling to operate; they need to look to the future and create more value.