Heavy equipment makers are witnessing a rise in sales of heavy machinery
By Chen Tong
02:58

Bauma China, the International Trade Fair for Construction Machinery, Building Material Machines, Construction Vehicles and Equipment, is ongoing in Shanghai, which attracts excavator makers to promote their products.

Heavy equipment maker Volvo brought its latest products for the buyers, lured by the massive recovery in the China construction market - its sales are up 30% so far.

"There are a lot of state-owned construction companies because a lot of stimulus packages went to large infrastructure projects. We have a lot of deals done. It can be either state-owned or privately owned. Also, this entire boom creates the flow all the way down. So a lot of mid-sized contractors are working for the sub-suppliers for these large companies. This may be the biggest year in China or the second-biggest year for China. But for excavators, definitely the biggest year," said Tomas Kuta, president of region Asia at Volvo Construction Equipment.

Despite the cooling of the industrial sector at the beginning of the year, the new figures show that more than 260,000 excavators were sold in China in the first ten months, a year-on-year jump of some 35%, a historic high. Analysts link the improved excavator sales directly to the government's campaign to develop "new infrastructure" this year.

"That means lots of sides are putting into production and also a good sign seeing people have the confidence to invest. From the economic perspective, that means it's going back to normal in the long run. We feel lots of confidence in the sector. Because of the new initiative China on the new infrastructure, it will boost the industry up and will give the space for the companies in this sector to keep investing in the new infrastructure," said Feng Hao, industrial sector partner of PwC China.

An excavator index compiled by the China International Capital Corporation and measuring excavator utilization in the market showed a year-on-year increase of nine percent in October. While the government's new infrastructure drive emphasizes high-end technology like 5G, big data and cloud algorithms in the industrial sector, all of those need buildings to sit in and foundations to sit on, construction of which requires excavators.

(Cover via CFP)