How to layout the 2020 market for the four leading construction machinery enterprises

How to layout the 2020 market for the four leading construction machinery enterprises

In recent years, the construction machinery industry in China has continued to develop, with increasing market concentration and a strong rise of local brands. In 2019, major enterprises disclosed their business plans and layouts for 2020 in their annual reports, and there were differences in the direction of their efforts in 2020. We have sorted out the market layout plans of the top four construction machinery enterprises in 2020 and their recent layout trends.

1、 Liu Gong: 1 yuan acquisition of Hertz China, fully entering the leasing market

Liu Gong mentioned in his 2019 financial report that one of his business plans for 2020 is to seek growth opportunities in emerging businesses and increase investment in aftermarket businesses in order to obtain new profit growth points.

Since the beginning of this year, LiuGong has increased its efforts to layout the aftermarket of construction machinery.

On March 2nd, Liu Gong announced the resolution of the 24th (extraordinary) meeting of the 8th Board of Directors, which mainly focused on Liu Gong's layout of leasing and second mobile phone business, especially the company's acquisition of 100% equity of Hertz Equipment Rental Holdings (HK) Limited's Hertz Equipment Rental Holdings (HK) Limited (hereinafter referred to as "Hertz China") for $1, which has attracted industry attention.

On April 30th, Liugong and Herc Holding jointly announced the completion of the transfer of equity in Hertz China, and Hertz China officially became a wholly-owned subsidiary of Liugong.

Hertz China's smooth acquisition signifies that LiuGong will accelerate its layout in the construction machinery and equipment leasing market, further expand LiuGong's comprehensive solutions, and achieve industrial upgrading. After joining LiuGong, Hertz China will become LiuGong's equipment leasing platform and empower LiuGong dealers to carry out leasing business.

2、 Zoomlion Heavy Industry: Expanding the Southwest Market and Accelerating the Layout of Earthmoving Machinery Market

One of the business measures mentioned by Zoomlion in its 2019 financial report for 2020 is to quickly break through potential markets. From the financial report, it can be seen that Zoomlion Heavy Industries has three main potential markets: earthwork machinery, aerial work platforms, and agricultural machinery. Among them, the goal of earthmoving machinery in 2020 is to leverage the company's advantageous resources, create a complete industrial chain ecosystem of production, sales, and supply, and achieve comprehensive breakthroughs and takeoff.

Earthmoving machinery is a key area of Zoomlion's strategic layout. Over the past 12 years, Zoomlion Earthmoving Machinery has continuously made efforts in product research and development, market layout, production and manufacturing, and has achieved significant results. Earthmoving machinery is becoming a strong growth point for Zoomlion Heavy Industry, with sales increasing by over 600% year-on-year in the first quarter of 2020.

On April 18th, Zoomlion Heavy Machinery Equipment (Sichuan) Co., Ltd. officially opened. As an important layout for Zoomlion to explore the Southwest regional market, it marks the further extension of Zoomlion's earthwork machinery strategic layout, which is of great significance for Zoomlion's earthwork machinery to build a better industrial chain and value chain.

3、 Sany Heavy Industry: Digitalization of Layout and Vigorously Promoting the Construction of "Lighthouse Factories"

In its 2019 annual report, Sany Heavy Industry mentioned that in 2020, the company will comprehensively promote the digitization of research and development, procurement, manufacturing, marketing services, and management, continue to promote the standardization of business processes, online business, and data intelligence, and vigorously promote the construction of lighthouse factories.

In 2019, Sany accelerated its intelligent and digital transformation, transferring all its core businesses online. It also took the lead in launching the construction of six "lighthouse factories" in the industry, fully introducing new production methods such as centralized data control and flexible production islands. Among them, after renovation, the production efficiency of Sany Pumping No. 18 intelligent workshop has increased by 50%, becoming a "new lighthouse" leading the industry in intelligent manufacturing.

On April 8, 2020, the Manufacturing Management System (MOM) project of Sany Group was launched in Changsha, marking an important step in the software upgrade of the "Lighthouse Factory". By connecting production, quality, logistics, inventory and other production processes, and deeply integrating with production line automation equipment, MOM will establish a unified production data model, further refine production scheduling to people and equipment, and promote the transformation of Sany production and manufacturing from local intelligence to comprehensive intelligence. It is reported that the new MOM system is planned to be launched in mid-2020 and will be piloted in five "lighthouse factories" and new heavy-duty truck factories. After the project renovation is completed, its production capacity will increase by 50%, manpower demand will decrease by 60%, and the site will be compressed by 30%.

4、 XCMG plans to increase its wholly-owned subsidiary by 200 million yuan and accelerate the layout of the electric forklift industry

XCMG mentioned in its 2019 annual report that in 2019, while promoting the development of the company's three main engines, XCMG also intensified its planning and development of electric forklifts and small construction machinery.

On April 22, 2020, XCMG announced that in order to further accelerate the strategic layout of the company's electric forklift industry and increase support for the business activities of the electric forklift industry, the company plans to increase its capital by 200 million yuan to its wholly-owned subsidiary Xuzhou XCMG Special Engineering Machinery Co., Ltd. (referred to as XCMG Special Machinery).

For the purpose of this investment, XCMG stated that the electric forklift industry is one of the important directions of the company's strategic layout. XCMG Special Machinery's existing registered capital and funding status cannot meet the needs of the rapid development of the company's electric forklift industry. This capital increase in XCMG Special Machinery will be used for XCMG Special Machinery's electric forklift related business, further accelerating the strategic layout of the electric forklift industry.