Chinese construction firms set to raise their game

Chinese Construction equipment manufacturers are aiming to raise their game in order to capture a larger share of the global market, in particular that of the US. Lessons have been learned, according to several senior executives from major Chinese firms who, as a group, faced the press during a presentation at the CONEXPO-CON/AGG in Las Vegas.
March 9, 2017 Read time: 3 mins
Chinese companies: more customer focus amid greater product durability

Chinese Construction equipment manufacturers are aiming to raise their game in order to capture a larger share of the global market, in particular that of the US.

Lessons have been learned, according to several senior executives from major Chinese firms who, as a group, faced the press during a presentation at the CONEXPO-CON/AGG in Las Vegas.

Greater machine durability coupled with improved customer service are central to improved sales, said Wang Min, chairman of 2490 XCMG. Chinese firms have not been good at talking among themselves in order to share best practice manufacturing for the greater good of the sector, said Wang in a forceful presentation.

Zeng Guang’an, chairman of 269 LiuGong, agreed. He pointed out that many Chinese firms already spend upwards of 4% of their global revenue on research and development. But Chinese manufacturers understand that more investment in money and time is needed to develop dealer networks and to improve after-sales service for its clients.

It is a given that “the customer comes first”, said Yu Hongfu, chairman of 1170 Sany, speaking about relationships with dealers and end-users. However, Chinese firms will have to dig deeper into that relationship to acknowledge and understand the pressures faced by their customers. “Customers come first but this must be accompanied by respect for the demands that are placed upon the end users,” he told the media.

Zhang Xiuwen, chairman of 1171 Shantui, said that the US firm 178 Caterpillar, being a successful global business, is a model and example for his firm, like it is for many others in China. “We have to get our production right first time, every time,” he said. It is one thing to add value to the machine but the key point in the relationship with customers is to add value to their business. A purchase is much more than just a machine and manufacturers have to work more with customers to understand their business. Of course, better dealerships and aftersales service are part of this.

As a group, they understood US president Donald Trump’s desire to see more products made in America by Americans. In today’s global climate, many Chinese manufactures are already moving in the direction of manufacturing in the US rather than reassembling their products.

What will likely push, or lead, Chinese companies to do more manufacturing in the US is the decreasing difference in manufacturing costs between China and other countries, including the Americas, as China becomes more wealthy and urbanised. “This has been going on for 10 years or so,” said Zeng Guang’an of LiuGong. “The manufacturing cost difference is now becoming so small.”

Many components, such as engines are manufactured globally for use in Chinese equipment so a Chinese product is not solely Chinese anymore.

Chinese supply chains are increasingly sophisticated and global.

But, Zeng noted, in order to manufacture in the US, Chinese firms also have to increase sales and market share to ensure it is economically feasible.

In the end, said Wang Min of XCMG, president Trump’s focus on infrastructure is good for the entire equipment manufacturing sector.

For more information on companies in this article

Related Content

  • Chinese construction equipment manufacturers increasing export focus
    December 2, 2013
    Chinese firms are growing their expertise in terms of products and international sales – Mike Woof reports China’s major off-highway construction equipment manufacturers have grown in a relatively short period and now number amongst the largest players in the sector. Some of the key firms are looking to boost exports and are providing tough competition, particularly in the emergent markets. Best known for its wheeled loaders, LiuGong has been developing its excavator range, with production of the E
    Read More
  • China looking to export construction machines
    March 16, 2012
    Chinese firms are looking to develop overseas sales but are using very different strategies – Mike Woof reports. Aggressive expansion plans will see Chinese manufacturers boosting overseas sales in coming years. These companies are developing bigger sales profiles around the world, particularly in emergent markets such as Africa, the Middle East and Latin America. It is worth noting too that Chinese products continue to gain in terms of quality and performance. For LiuGong, Sany, Shantui, XCMG and Zoomlion
    Read More
  • LiuGong embraces Industry 4.0
    November 27, 2018
    LiuGong chairman Zeng Guang’an says that the firm is fully embracing Industry 4.0 technology. Coupled with ongoing machine development, an expanding global sales and manufacturing network and long-established strong relationships with customers and suppliers, this is enabling the Chinese construction equipment giant to target RMB 50 billion (US$7.18bn) operating revenue by 2025. Chairman Zeng outlined the impressive scale of LiuGong’s future ambitions during an impassioned speech in front of an audi
    Read More
  • China banks on the Belt and Road Initiative
    October 8, 2019
    Changsha, the capital of Hunan province, is capitalising on its well-established equipment and componentry manufacturing base as China’s global Belt and Road Initiative gathers momentum.
    Read More

Highlighted Content