According to the China Construction Machinery Association (CCMA), China’s main construction machinery manufacturers witnessed a steep decline in sales during the month of April. CCMA Deputy Secretary General Kang Zhigian said that the excavator sales volume stood at about 20,000 sets, down 50 percent from March 2011.
Loaders and Bulldozers also saw decreased sales numbers last month. Chinese loaders alone saw a drop of 30 percent, the largest decrease in a decade.
Sales volume for Guangzi Liugong Machinery Co. Limited dropped by 35.2 percent, Xiagong Machinery Co. Limited fell by 6.62 percent, and Longgong Machinery Co. Limited saw a slight decrease of 3.8 percent.
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Typically a slight seasonal sales drop occurs every April, but a 30 percent decrease is rare. Experts are trying to pin down a potential reason for this steep decline.
According to Mr. Wang Song, a commissioner with Sanyi Heavy Industry Co. Limited, one possible explanation is the financing constraints that China’s policies have placed on engineering construction fields like real estate.
Deputy Secretary General Zhigian believes it is due to bad business practices by the entire industry throughout China.
"Some enterprises employed irrational promotion methods to grab more market shares, some even adopt measures like zero down payment mortgage," said Zhigian.