"Twelfth Five-Year Plan" Begins China's Construction Machinery Development is Constrained by Many Factors

The "Eleventh Five-Year Plan" ended successfully, and China's construction machinery industry also earned a full pot. At the start of the “Twelfth Five-Year Plan”, under the further promotion of the strategy of developing the western region, rejuvenating the rise of the Northeast and Central China, and building a national strategy in Xinjiang, the industry expects that by 2015, the sales revenue of the construction machinery industry in China will reach 900 billion yuan. About the average annual increase of more than two digits. In terms of exports, by 2015 China's export of construction machinery products will reach about 20 billion U.S. dollars, becoming a world's largest exporter. Under the great development situation, we must realize that the development of Chinese construction machinery companies is still constrained by many factors.

Upstream raw material costs increase Recently, the steel index executives said that in 2011 the global iron ore spot price will hit a record high, refreshing the previous record level in 2008 when the last round of commodity prices soared. The increase in iron ore prices will inevitably drive the new wave of price increases in the steel industry. At present, some domestic steel mills have already raised the banner of price increase. As the domestic steel price benchmark, Baosteel once again raised the steel price in February, with an increase of RMB 100-300 per ton. As the main raw material for construction machinery products, steel will directly increase its cost.

The weakness of core components For a long time, the key factor restricting the development of China's construction machinery industry is the dependence of core components on imports. Behind the rapid development of China's construction machinery industry, Chinese brands are threatened by the hollowing out of core component technologies. It is understood that at present a number of domestic construction machinery brands have adopted foreign core components. The Cummins brand is the majority of the power configuration, and most of the hydraulic components are Japanese, Korean or German brands. At the dawn of the new round of development of the “Twelfth Five-Year Plan”, the core components and parts will become the top priority for China’s construction machinery industry.

Environmental Protection and Energy Saving Standards Improvement Since January 2011, the European Commission has implemented Phase IIIB emission standards for diesel engines with non-road mechanical power ranging from 130kW to 560kW. The EU IIIB phase emission standard limits the emission particulates of the engine from 0.2 g/kWh to 0.025 g/kWh. In order to meet this standard, diesel engines must be equipped with particulate filters. Our country promises that by 2020, the carbon dioxide emissions per unit of GDP will be 40% to 45% lower than in 2005. The "Twelfth Five-Year Plan" will set emission reduction targets as important work targets, increase the technological added value of product sales, and further increase the international competitiveness of domestic enterprises.

The appreciation of the renminbi restricting the appreciation of export renminbi will restrict the development of construction machinery exports. From the data, it can be seen that the pace of exports of industrial enterprises in 2010 has been decelerating significantly, and the production and sales of many overseas counterparts have accelerated, while the intensification of competition in foreign markets has also caused the export of domestic companies to be blocked. As a sub-industry in the equipment manufacturing industry, sales revenue of more than 320 billion yuan each year is insignificant for the entire machinery industry. To achieve their long-term development, industry companies must increase the competitiveness of their export products, instead of being “ The appreciation of the renminbi is a constraint, otherwise the development of overseas markets will be difficult.

"Twelve Five" development, China's construction machinery industry will face costs, technology, environmental protection and other crises. Compared with some foreign countries, China's construction machinery industry is large but not strong. As the development of China's construction machinery industry matures, the bottleneck of core components is expected to improve in the next three to five years. Some leading companies in the industry have begun to engage in R&D and production of core components. In the development path of China's construction machinery industry, opportunities and challenges coexist, and companies in the industry should find the right direction and continue to achieve new breakthroughs and big leapfrogs.