Why Has the Excavator Industry Stood Out?

The construction machinery industry has undergone a gradually flattening development process over the past two decades. Domestic brands have experienced a progressive localization process and have gradually caught up with and surpassed foreign brands in terms of product quality and channel capabilities. In future global competition, manufacturing capabilities and cost - effective supply chain systems will become increasingly crucial. Currently, domestic construction machinery brands already possess global competitive advantages, especially in terms of future - oriented cost and manufacturing capabilities. There is also huge potential for labor substitution demand in the future.

Overall, the strong rise of small and mini - excavators and the cyclical nature of large excavators have been well - established. The future excavator market remains on a high - speed and high - quality development trajectory.

In the second half of the year, with the continuous economic recovery, increased investment, and the simultaneous advancement of new and old infrastructure projects, excavator sales are expected to continue growing.

2021 Industry Outlook

From the perspective of the market cycle, the industry is very likely to maintain positive growth in 2021, exceeding market expectations.

• •On one hand, reviewing the 28 - year development process of the industry, every negative growth in industry sales occurred under the backdrop of tightened macro - policies.
• •On the other hand, this year is the year of the pandemic, which has had a significant impact on the real economy. Coupled with the complex global political and economic situation, it is expected that the world will maintain a relatively loose policy environment in 2021.

In the long run, the domestic construction machinery industry still has room for growth. Leading companies have significant potential to increase their market shares both domestically and internationally. In the future, these leading companies will venture into more new product categories and further expand their domestic and international market shares in existing advantaged product categories.

According to research, the sales exceeding expectations in the first half of this year stem from the new demand brought about by increased engineering projects. The replacement demand has not yet kicked in. We believe that replacement demand will continue to be a lubricant for the stable growth of industry sales in the future:

• •Due to different service lives, domestic and foreign brands will update their products in an offsetting manner, ensuring the stable and continuous replacement demand.
• •Compared with developed countries, China's non - road machinery emission standards lag behind by about 10 years, and tightening these standards in the future is an inevitable trend.

In conclusion, the operating rate and downstream investment data confirm each other, indicating that the construction machinery industry is still in a high - prosperity state. It is expected that the excavator market in the second half of the year will maintain a relatively strong year - on - year growth trend, but the growth momentum will be weaker than that in the first half. The annual production and sales volume of excavators may reach a historical high.

Significance of Construction Machinery in the Industry

Construction machinery is one of the important sectors of China's machinery industry. The market demand for its products is greatly influenced by national infrastructure construction. Its downstream customers are mainly concentrated in investment - intensive industries such as infrastructure and real estate, and it is closely related to the macro - economic cycle. As 2021 enters the post - pandemic economic recovery period and the start of the 14th Five - Year Plan is expected to drive the launch of major engineering projects, the investment in infrastructure is likely to increase. The demand for construction machinery such as excavators will continue to rise, and the prosperity of the industrial chain is expected to grow continuously.