construction equipment, China, highway--Chinese equipment market sees massive surge

Construction equipment sales in China are expected to grow a massive +27% this year to a record volume of 372920 machines, according to a new report from specialist consultant Off-Highway Research.

"The numbers are absolutely enormous. China easily accounts for more than 50% of the world equipment market," said Off-Highway Research managing director, David Phillips.

Among the more striking aspects of the company's mid-year report on China are its forecasts for crawler excavator sales. Unit sale are expected to grow some +66% this year to 135000 machines - a record volume. To put this in context, even at the height of the boom in 2007, excavator sales in Europe were just a quarter of this at 35697 machines, while the North American market topped-out in 2005 at about 30000 units.

China's US$ 585 million stimulus spending plan is the main driver behind the overall rise in sales, but according to Off-Highway Research, there are other shifts taking place in the market.

"Wheeled loaders are being replaced very rapidly by hydraulic excavators. They may cost more, but they are more productive, more reliable and more profitable," said Mr Phillips.

"There are also a lot of Government subsidies going out to rural areas, which are becoming big markets for excavators, particularly the 6 to 9 tonne class machines," he added.

The change in buyer preferences is bourn out by the company's forecast for wheeled loader sales in China this year, with volumes expected to rise just +5% to 145000 machines.

Off-Highway Research expects 2010 to be a peak year for the Chinese market, with overall equipment sales falling back by -9% in 2011 to 340565 machines. "We have forecast quite a dip - more of a correction - in 2011. People are buying ahead at the moment," said Mr Phillips.

Indeed, 2011 is expected to see sales for almost all types of machine drop from their highs this year. The only exception is mini excavators, with sales expected to rise from this year's forecast volume of 29000 units to 32000 such machines in 2011.

For more information, visit www.offhighway.co.uk.