Dallas, TX -- (SBWire) -- 10/14/2010 -- Machinery demanded in the comprehensive mechanized construction of earthwork, stonework, concrete work and building & installation projects is called construction machinery. The production of the construction machinery industry is featured with multiple varieties and small batch. This industry is a technology-intensive, labor-intensive and capital-intensive sector. Construction machinery is mainly applied in the national defense construction, transportation construction, construction and production in the energy industry, construction and production in raw material industries (e.g. mining), agriculture, forestry, water conservancy construction, industrial and civil buildings, urban construction and environmental protection, etc.

In 2009, the market scale of Chinese construction machinery industry was about CNY 320 billion (USD 46.90 billion) with the growth rate of over 18.5%. Though Chinese construction machinery market achieved high-speed growth in the past few years, direct export to China is not the optimal strategy for foreign manufacturers, except the export of a few high-end products. The price of construction machinery in the global market is usually much higher than that in Chinese market. The prices of many products of foreign manufacturers are higher than that of Chinese local products by 50%-150%. Due to the large price difference, a great many Chinese domestic users prefer homemade cheap products with slightly lower quality.

Thus, to acquire Chinese domestic construction machinery enterprises is the first choice for transnational construction machinery enterprises to search for production and sales opportunities in China. By the acquisition, foreign-funded enterprises can immediately acquire mature production lines and sales channels. Many Chinese construction machinery products are suffering overcapacity and low profitability. When the output value is growing rapidly, the competition within the industry leads to the less profit growth than the revenue growth. Once the downstream demand growth slows down, many enterprises in the industry will fall into the passive situation. They have to rely on the price competition to survive, but do not have adequate funds and vitality for the long-term development.

Foreign-funded construction machinery enterprises usually carry out M&A in China by acquiring the shareholding. In the initial years, they will retain the original brands. Later, they will abandon the original brands and only produce products of foreign brands. This is the optimal mode for foreign-funded manufacturers, by which they can be familiar with Chinese market in the transition period and acquire the control on brands. Through years of rapid development, Chinese construction machinery manufacturers have strong manufacture capacity, but their funds, management and technological capacities lag behind the international and domestic advanced level greatly. M&A can enable foreign-funded enterprises to significantly improve the profitability with low cost.

Influenced by the financial crisis, Chinese construction machinery export suffered sharp decline in 2009. The export value amounted to USD 7.71 billion, dropping by 42.6% YOY. In 2009, the import value of Chinese construction machinery industry totaled USD 5.15 billion, falling by 14.4% YOY. During the export decline, Chinese local market was very important for the construction machinery industry. At the end of 2008, Chinese government released the plan to invest CNY 4 trillion (USD 570 billion) during 2009-2010. Over 50% of the investment is related to the infrastructure construction. It is predicted that the investment will generate the demand value of tens of billions USD in Chinese construction machinery market. In 2009, Chinese fixed asset investment reached CNY 22.48 trillion, 30.1% increase over 2008. Meanwhile, the fixed asset investment in Chinese railway industry reached CNY 700 billion, including CNY 600 billion for capital construction with the growth rate 79% YOY. The investment in Chinese real estate development totaled CNY 3.62 trillion in 2009, rising by 16.1% YOY.

It is forecast that Chinese construction machinery market will become the competition focus of global construction machinery giants in the coming few years.

Through this report, readers can acquire more information:

Production status of Chinese construction machinery industry
Demand of Chinese domestic construction machinery market
Investment in Chinese construction machinery industry
Sub-sectors of Chinese construction machinery industry
Import and export of Chinese construction machinery industry
Major enterprises in Chinese construction machinery industry and their operation
Influence of global financial crisis on Chinese construction machinery industry
Prediction on development tendency of Chinese construction machinery industry
Investment opportunities in Chinese construction machinery industry
Following persons are recommended to buy this report:

Construction machinery manufacturers
Construction machinery traders
Construction machinery contractors
Research institutes concerning Chinese construction machinery industry
Investors concerning Chinese construction machinery industry
Others concerning Chinese construction machinery industry

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