China Excavator Supply Exceeds Demand

According to data from the China Construction Machinery Industry Association, among the overseas markets, there is a large demand for engineering construction in the Southeast Asian market, and the number of construction hours has continued to increase positively year-on-year for over 24 months. According to Komatsu’s data, the average monthly operating hours in Southeast Asia in 2022 was 198 hours, which is 2-4 times that of other regions or countries.

As a leader in the domestic industry, XCMG (000425. SZ) replied to investors’ questions on the interactive platform in late March, saying that the amount of the countries and regions along the “the Belt and Road” in the export region of XCMG currently accounts for about 70% of the company’s total export amount, and its products cover 63 countries and regions along the line. The company’s exports in 2022 hit a record high and are expected to continue to grow in 2023.

For small and micro excavators, the market has been growing against the trend for some time, and they are the beneficiaries of the “housing economy”.

The export of small excavators has been increasing for two years. Unlike large and medium-sized excavators, which perform better in markets outside Europe and the United States such as Southeast Asia and the Middle East, the main export markets for small and medium-sized excavators are still in Europe and the United States. Affected by the “housing economy” and other factors, small and medium-sized excavators for household and agricultural use continued to grow during the Covid-19.

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