The potential of developing machinery in the Asian market is huge

With the slowdown of China’s economic development, the construction of infrastructure projects has decreased and the construction machinery industry has become increasingly difficult. The destocking of construction machinery products is a major problem facing domestic construction machinery companies. To solve this problem, we must look at China's neighboring countries. Their demand for construction machinery products is increasing day by day, and the excellent cost-effectiveness of China's engineering machinery products will be their best choice. For Chinese companies, looking at the Asian market is undoubtedly the best way to solve the problem.

India will usher in the outbreak of the construction machinery market in the next 5-10 years. According to India's "12th Five-Year Plan" economic plan (2012-2016), India will focus on infrastructure construction in the next five years and define "construction" as the driving force for economic restructuring. In India's 12th Five-Year Plan, India’s infrastructure investment is expected to reach US$1 trillion in the next five years alone. Investment areas include roads, railways, urban infrastructure, commercial and residential buildings, ports, and electricity. , water conservancy facilities, mining, oil, gas, and airports. Between 2012 and 2030, India will invest at least 10% of its GDP in infrastructure. In addition, according to statistics, from 2007 to 2015, India's capital allocated to the construction machinery market has reached 40 billion U.S. dollars. This means that about 17% of the investment will increase each year in the next 8 years. At the same time, the booming development of the Indian real estate industry, the increase in family income and the rapid urbanization process have led to the expansion of middle-class groups in India. The urbanization rate is expected to increase from 28% in 2001 to 40% in 2030.

It is understood that only 28% of India's local machinery can adapt to the domestic market, and Indian engineering construction companies need to spend at least two years before they can purchase construction machinery locally. However, the construction machinery purchased in China can be put into use immediately at the construction site within six months. . Therefore, China's construction machinery is more competitive than India's local construction machinery. In addition, Indian engineering construction companies have gradually abandoned the purchase of construction machinery in major countries such as Germany, Japan, and the United States, because Chinese construction machinery is cheaper than Germany, Japan, and the United States, and can be used more quickly. This shows that India’s demand for construction machinery in China has greatly increased.

The market demand for construction machinery in Vietnam is large. Vietnam is a relatively weak country in the manufacturing industry. The entire industry in Vietnam began to accumulate with assistance from China and the Soviet Union. Since the 1990s, Chinese, Taiwanese, South Korean and Japanese companies have come to invest in Vietnam. Japan mainly invests in the motorcycle industry in Vietnam; in Taiwan, there are more plastics machinery and packaging machinery; South Korea invests more in the real estate industry, and then there are some manufacturing industries later. Especially in southern Vietnam, all manufacturing equipment is imported from abroad.

At present, Vietnam’s demand for machinery and technology is very strong, while Vietnam’s domestic industry is still in its infancy and cannot meet the needs of social development. More than 90% of machinery and equipment rely on foreign imports. However, the local construction machinery company in Vietnam prefers to sign a mechanical purchase contract or import contract with a foreign company given that consumers in the country have insufficient confidence in the local machinery purchase. The current development bottleneck of Vietnam's construction machinery industry is not easy to be broken. Domestic sales are sluggish, and foreign machinery imports account for 50% of Vietnam's total imports. For China's construction machinery companies, it is a rare opportunity for development.

Mongolia has spent huge sums of money to invest in the construction machinery industry. The housing prices in Mongolia show a relatively rapid upward trend, which is due in large part to the fact that real estate developers rely on high-interest loans from commercial banks to conduct business operations. At the same time, the approval process of housing construction projects has been delayed and lengthy. This has also led to the An important reason for the rapid rise in the country’s housing prices. According to a recent report from the Mongolian Ulaanbaatar Post, in order to curb the rapid rise in housing prices, the Mongolian government and important banks have provided high-quality low-interest soft loans to building material manufacturers and suppliers. At the same time, the Mongolian government has invested heavily in large-scale infrastructure construction. Almost all building materials in Mongolia depend on imports. Imported materials mainly come from China, followed by countries such as Russia, Japan, and South Korea. Due to the different import channels, the materials are uneven and the price difference is also large.

The largest investment plan in Thai history is about to start. Thai Prime Minister Yingluck revealed on October 5th in Bangkok that the total amount of this plan is up to US$90 billion and will be mainly used for infrastructure construction projects in the region to meet the expectations of the Asean Economic Community (AEC) and 2015 The need for a rapid economic development in the Mekong Subregion (GMS). Thailand’s “Bangkok Post” stated that Thai Prime Minister Yingluck announced the investment plan when he delivered a keynote speech at the Thai Investment Conference. Yingluck said that as the center of ASEAN, Thailand plays an important role in ensuring interconnection and interoperability within the region. The projects that the Thai government plans to include Thai-Laotian high-speed railway, Thailand flood control management and other projects. Thai government sources also revealed that this investment plan will last for 7 years, and the main source of funding will depend on credit. Thailand’s $90 billion investment plan will undoubtedly provide a huge opportunity for the current sluggish domestic construction machinery companies. The entire Southeast Asia region is crucial for Chinese construction machinery companies.

The rise of Southeast Asian economies is a hot market for construction machinery. In 2012, in the face of the European debt crisis and the Spanish real estate bubble, the entire world economy responded to the recession, and the Southeast Asian region took a sudden turn for the better. With the continuous construction of infrastructure construction projects such as housing construction, highways, and power stations, Southeast Asia’s rapid economic growth has become a hot spot for China’s construction machinery exports.