Domestic construction machinery welcomes a good start, policies help industry demand continue to rec
Created Date: 19th Mar 2025
In January and February 2025, the sales and operation of domestic construction machinery exceeded expectations, and there was a good catalyst in the short term. In January and February 2025, the sales of excavators (including exports) reached 31782 units, a year-on-year increase of 27.2%; Among them, 17045 units were sold domestically, a year-on-year increase of 51.4%. From the perspective of construction, the domestic construction hours of Komatsu in January 2025 were 66.2 hours. Referring to the data of previous Spring Festival months, the construction hours in February 2024 were 28.3 hours, and the construction hours in January 2023 were 42.5 hours. The data for 2025 is significantly better than the Spring Festival months of the past two years. Both the sales and production ends have performed well, reflecting the trend of downstream recovery in construction machinery.
From the perspective of growth sources, we are optimistic about the sustained growth of the upgrading and replacement of construction machinery, which will drive the sales of construction machinery.
The sales of construction machinery such as excavators grew rapidly from the bottom of 2015 to the peak in early 2021. Considering that the service life of construction machinery is usually 8-10 years, we estimate that there will be a compound 30% increase in replacement volume of domestic construction machinery in the next 25 years and the following years, forming a significant source of recent sales growth. In addition, a large number of construction machinery second-hand phones are exported to developing countries overseas, which objectively lowers the domestic ownership of construction machinery and is also a reason for driving sales of new machines.
The policy support of the two sessions was strong, and the medium-term demand for construction machinery continued to recover with guaranteed funds. In the 2025 government work report, it was proposed to issue 1.3 trillion yuan of ultra long term special treasury bond this year, an increase of 300 billion yuan over the previous year; Accelerate the implementation of a number of key projects and promote the smooth completion of major projects in the 14th Five Year Plan; We plan to arrange special bonds for local governments worth 4.4 trillion yuan, an increase of 500 billion yuan year-on-year, with a focus on investment and construction, land acquisition and storage, purchase of existing commercial housing, and digestion of local government debt. The report proposes to strengthen the countercyclical adjustment of fiscal policy, especially the issuance of treasury bond, special bonds and the government's "chemical bonds", which is expected to play a driving role in infrastructure investment and further drive the demand for downstream equipment.
In terms of structure, the 2025 government work report proposes to deepen the implementation of the new urbanization strategy, continuously promote urban renewal and the renovation of old urban residential areas, accelerate the improvement of urban flood control and drainage systems, as well as the construction of gas, water supply and drainage, heating, underground pipe galleries, etc; Develop digital and intelligent infrastructure, and improve accessible and aging friendly supporting facilities.
The report indicates that the government will continue to strengthen investment in urban infrastructure construction and promote the development of new urbanization; Especially in the fields of underground engineering, municipal construction, water conservancy engineering, etc., the demand for construction machinery will continue to grow.
In January and February 2025, the export sales of domestic construction machinery continued to grow, and there is still great potential for construction machinery to go abroad. In January and February 2025, the export sales of excavators reached 14737 units, an increase of 7.4% year-on-year; The export sales of loaders reached 8439 units, a year-on-year increase of 8.3%. Looking ahead to 2025, China's construction machinery exports are facing opportunities and challenges such as changes in the Russia Ukraine situation, increased demand for infrastructure and mining in Southeast Asia, Africa, and the Middle East markets, and increased penetration in high-end markets in Europe and America. With the increasing overseas layout efforts of China's construction machinery leaders, China's construction machinery exports are expected to maintain a growth trend.
The sales of electric loaders will significantly increase in January and February 2025, and the electrification of construction machinery is expected to accelerate. The sales of electric loaders in January and February 2025 will reach 2413 units, a year-on-year increase of 261.2%; The electrification rate reached 14.5%, an increase of 12.0 percentage points year-on-year. In the 2025 government work report, it is proposed to accelerate the comprehensive green transformation of economic and social development, promote energy-saving and carbon reduction transformation in key industries, and advance the development and utilization of new energy; Coordinate industrial restructuring and promote green and low-carbon development. We believe that greening and electrification are one of the key development directions for the construction machinery industry in the future. Domestic manufacturers are constantly catching up with the trend of electric motors, and the process of electrification of construction machinery is expected to accelerate, bringing further increase in revenue and profit for host factories.
From the perspective of growth sources, we are optimistic about the sustained growth of the upgrading and replacement of construction machinery, which will drive the sales of construction machinery.
The sales of construction machinery such as excavators grew rapidly from the bottom of 2015 to the peak in early 2021. Considering that the service life of construction machinery is usually 8-10 years, we estimate that there will be a compound 30% increase in replacement volume of domestic construction machinery in the next 25 years and the following years, forming a significant source of recent sales growth. In addition, a large number of construction machinery second-hand phones are exported to developing countries overseas, which objectively lowers the domestic ownership of construction machinery and is also a reason for driving sales of new machines.
The policy support of the two sessions was strong, and the medium-term demand for construction machinery continued to recover with guaranteed funds. In the 2025 government work report, it was proposed to issue 1.3 trillion yuan of ultra long term special treasury bond this year, an increase of 300 billion yuan over the previous year; Accelerate the implementation of a number of key projects and promote the smooth completion of major projects in the 14th Five Year Plan; We plan to arrange special bonds for local governments worth 4.4 trillion yuan, an increase of 500 billion yuan year-on-year, with a focus on investment and construction, land acquisition and storage, purchase of existing commercial housing, and digestion of local government debt. The report proposes to strengthen the countercyclical adjustment of fiscal policy, especially the issuance of treasury bond, special bonds and the government's "chemical bonds", which is expected to play a driving role in infrastructure investment and further drive the demand for downstream equipment.
In terms of structure, the 2025 government work report proposes to deepen the implementation of the new urbanization strategy, continuously promote urban renewal and the renovation of old urban residential areas, accelerate the improvement of urban flood control and drainage systems, as well as the construction of gas, water supply and drainage, heating, underground pipe galleries, etc; Develop digital and intelligent infrastructure, and improve accessible and aging friendly supporting facilities.
The report indicates that the government will continue to strengthen investment in urban infrastructure construction and promote the development of new urbanization; Especially in the fields of underground engineering, municipal construction, water conservancy engineering, etc., the demand for construction machinery will continue to grow.
In January and February 2025, the export sales of domestic construction machinery continued to grow, and there is still great potential for construction machinery to go abroad. In January and February 2025, the export sales of excavators reached 14737 units, an increase of 7.4% year-on-year; The export sales of loaders reached 8439 units, a year-on-year increase of 8.3%. Looking ahead to 2025, China's construction machinery exports are facing opportunities and challenges such as changes in the Russia Ukraine situation, increased demand for infrastructure and mining in Southeast Asia, Africa, and the Middle East markets, and increased penetration in high-end markets in Europe and America. With the increasing overseas layout efforts of China's construction machinery leaders, China's construction machinery exports are expected to maintain a growth trend.
The sales of electric loaders will significantly increase in January and February 2025, and the electrification of construction machinery is expected to accelerate. The sales of electric loaders in January and February 2025 will reach 2413 units, a year-on-year increase of 261.2%; The electrification rate reached 14.5%, an increase of 12.0 percentage points year-on-year. In the 2025 government work report, it is proposed to accelerate the comprehensive green transformation of economic and social development, promote energy-saving and carbon reduction transformation in key industries, and advance the development and utilization of new energy; Coordinate industrial restructuring and promote green and low-carbon development. We believe that greening and electrification are one of the key development directions for the construction machinery industry in the future. Domestic manufacturers are constantly catching up with the trend of electric motors, and the process of electrification of construction machinery is expected to accelerate, bringing further increase in revenue and profit for host factories.