Excavator sales are down 10.4% year-on-year in May, according to data from China Construction Machinery Network. Weak demand for earthmoving equipment could be bad news for industrial companies world-wide. Excavators are one of the few sub-sectors of the Chinese construction equipment market still dominated by foreign firms like Caterpillar.
It's also bad news for local manufacturers, who have been making great strides as a result of China's construction boom, increasing their market share from just 5% to a third over the past decade. Firms like Sany Heavy Industry and Changsha Zoomlion have made huge investments in increasing production capacity. Victoria Li, an expert on the construction machinery sector at Credit Suisse, said that Sany has plans to increase production to 80,000 units in 2012, compared to sales of 13,393 in 2010.
Source: Wall Street Journal