In today's domestic construction machinery market, a decline in demand and the gradual erosion of the demographic dividend have intensified the challenges faced by companies in terms of their reliance on core components. This issue has persisted for years, with no effective solution to address the root cause. For a long time, the lack of competitiveness in key parts has been a major bottleneck for the development of China’s construction machinery industry.
Currently, the industry still heavily depends on imported components such as hydraulic systems, engines, control units, and transmission systems. These critical parts are not only expensive but also subject to supply constraints, which significantly impact the profitability and operational flexibility of domestic manufacturers.
According to industry analysts, the cost of core components in construction equipment can account for over 40% of the total price. For example, in excavators, the hydraulic system and engine alone make up around 42% of the overall cost. Hydraulic components, which are largely imported, have become a major factor in squeezing profit margins. Some reports suggest that these imported parts consume as much as 70% of a company’s profits.
Moreover, foreign suppliers often impose long lead times on Chinese companies. For instance, the supply cycle for Rexroth, a German manufacturer, can last as long as 88 weeks, forcing Chinese firms to plan their purchases more than a year in advance. This creates significant operational challenges and limits responsiveness to market changes.
Foreign brands dominate more than 70% of the domestic excavator hydraulic cylinder market. With this market power, they often enforce restrictive terms, including requiring early orders and extending delivery times. A report from the People’s Daily several years ago highlighted how companies like Zoomlion and Sany had to adjust their production schedules due to supply shortages of overseas components.
Looking at the "12th Five-Year Development Plan" for the construction machinery industry, it is clear that high-tech and high-value components—such as transmissions, control systems, diesel engines, and key hydraulic parts—are still largely imported. The average import price for these components exceeds $80,000 per ton, highlighting a severe shortage in domestic manufacturing capabilities. This gap between supply and demand severely hinders the industry’s ability to move toward high-end technological products.
To break free from this dependency, the industry must invest in R&D, enhance local manufacturing capabilities, and build stronger supply chains. Only through innovation and self-reliance can China’s construction machinery sector overcome its current limitations and achieve sustainable growth.
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