Lying flat at home for a few days, I discovered a very important thing:
The happiness of an adult lies in making money. If you continue to make money, you will continue to be happy. If you don’t make money, you will not be happy during the New Year.
Well, I’m not happy.
So take it easy and return to work from today. The official account will be updated normally. Let’s talk about the industry first, and the philosophical articles will be updated slowly.
In the first article of the new year, let’s talk about the general trend of the industry from a macro perspective. Of course, the following contents are all personal irresponsible guesses and conjectures. Follow your feelings, not rigorous conclusions.
1. The overall trend
1. In the new year, domestic construction machinery companies are still facing the environment of high prosperity in overseas markets and a downward cycle in the domestic market.
2. The types of machinery (concrete equipment, earthmoving equipment, tower cranes) that are strongly related to real estate are still facing severe challenges.
3. The North American market, the Indonesian market, and the Indian market in overseas markets are in a highly prosperous state. However, with the continuous repair of supply chain problems of strong overseas brands such as Carter, Komatsu, and Hitachi, the continuous improvement of overseas shares of domestic brands will face channel capabilities. , brand recognition, overseas production and many other challenges, performance will diverge.
4. In the domestic market, aerial work platforms are a rare sub-sector that can see deterministic growth, and aerial work platforms can still achieve growth of more than 30% in 2023.
5. If electric and compact equipment can solve a series of problems such as economy, ease of practicability, and supply chain parts adaptation, it will become the source of high growth in the next era. Personally, I am very optimistic about this.
2. Overseas market
In 2023, it is expected that domestic excellent construction machinery companies will still be able to maintain a growth rate of more than 30% in overseas sales. The most important thing to watch is the improvement of corporate capabilities. Excellent companies can solve a series of tasks such as management output, overseas production bases, channel construction, and brand power enhancement during the dividend period. During this cycle, they will truly break from the chrysalis and become a butterfly, and they will truly become a strong global brand from mainly relying on the Chinese market.
In terms of general logic, I still maintain my own opinion. The North American market is the high ground of the global construction machinery market, and those who win North America win the world. On the one hand, the North American construction machinery market is still in a super boom cycle. In 2021, the North American market has surpassed the Chinese market to become the world’s largest construction machinery market again.
However, the supply chain dilemma of construction machinery companies in the North American market is still continuing, and only 19% of the equipment is currently in balance.
In the booming market, the demand is huge, the customer funds are abundant, the credit is extremely high, and the imbalance between supply and demand constitutes the cornerstone of the long-term high growth of the North American market. For domestic construction machinery brands, seeking a sense of presence in this high-end market is the top priority.
As for the developing countries, the markets of Indonesia and India are the key markets worthy of attention. Both countries appear to be in the early stages of large-scale infrastructure development, with plenty of room for future growth.
Changes in the market share of major brands in the Indonesian market:
As for the Indonesian market share, Komatsu and Hitachi are still in a very strong position in the Indonesian market due to the high prosperity of the resource-based business. For domestic Japanese brand agents, the second-hand equipment market in Indonesia may be worth exploring.
3. Domestic market
In the domestic market, the excavator market is affected by the switch of emission standards, and it is expected that the data of Q1 will be ugly. The outlook for the whole year is not optimistic, and the real estate industry, one of the main sources of demand, is hard to say.
The current policies of the real estate industry are frequently blown by warm winds, but now the situation is becoming more and more clear. The situation of the real estate industry is a bit like:
Housing prices have exceeded the limit of residents’ disposable income, and it is difficult to increase demand in the short term.
To put it plainly, six wallets are not enough to buy a house, and enough is enough to buy it early.
From this perspective, the situation of concrete equipment, earthwork equipment, and tower crane equipment that are strongly related to real estate will not be very good. And it is difficult for me to agree that the sales data in 2022 is already ugly, and 2023 will be growth no matter how you look at it. Judging from the microscopic survey of various lessors, the purchasing confidence of equipment holders is now at a very low stage. This downturn is difficult to repair in the short term, and will eventually lead to a negative cycle of sales.
It is worth mentioning the aerial work platform market (MEWP):
In the interviews with lessors years ago, I heard that many lessors had negative expectations for next year and did not want to purchase equipment. But after talking in depth, I am highly optimistic about the market growth of aerial work platforms next year. The core reasons are:
The downstream demand for aerial work platforms is still very strong.
Unlike other construction machinery and equipment, the downstream demand for aerial work platforms is mainly concentrated in two areas: municipal maintenance and manufacturing plant construction, and the market demand for these two areas is still expanding. In the end, the lessor was in an environment where:
The business is very saturated, the occupancy rate is very good, but the money is hard to get, and the payment rate is deteriorating. Now I want to buy a car, I have no money. Why don’t I buy it, and there are many customers who want cars, so I am in a dilemma.
Usually under such circumstances, the domestic business environment will definitely favor demand expansion rather than risk aversion.
This is the biggest logic for me to be optimistic about the sales volume of the aerial work platform market in 2023.
Then explain the two requirements a little bit
A. Municipal maintenance. Municipal construction and municipal maintenance are two different tasks. Due to the shortage of local finances in municipal construction, municipal construction in many cities is becoming saturated and demand is shrinking. Municipal maintenance is a completely different matter. The demand for municipal maintenance is long-term and continuous, and the longer the time, the more such demand is expanding. In this regard, the most vivid case is: Shanghai and Shenzhen are regarded as cities with extremely high infrastructure saturation among the cities in the country, and these two cities are precisely the two best markets for the aerial work platform leasing industry, which can be called the gold market.
B. Manufacturing plant construction
The added value of my country’s manufacturing industry has increased from US$625.2 billion in 2004 to US$4.87 trillion in 2021. The CAGR of the added value of the manufacturing industry from 2004 to 2021 will be about 13%, and its share in the world will increase from 9% to about 30%.
The continuous growth of the manufacturing industry has brought about the golden years of the domestic aerial work platform leasing industry, and the important task of upgrading the manufacturing industry in my country is still a long way to go. In the future, the semiconductor industry, photovoltaics, automobiles, wind power and other new energy industry chains will all be In the state of long-term demand blowout, the construction of factories in these industries is precisely the largest user of aerial work platforms.
Under this strong demand, the aerial work platform industry in 2023 is still a big year worth looking forward to, and it is worth fighting for and sleepless nights for practitioners. After all, when demand falls you will find:
What a blessing to be in an industry where demand continues to grow.
Finally, a happy new year to all readers:
I wish all readers good health and success in their careers.
Wish you prosperity and wealth.
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