A CHANGING MARKET

SDLG’s Xiaohui Wang tells Andy Brown about how Covid changed things for Chinese OEMs, the company’s global ambitions and the potential future of electric equipment

Thankfully, for most of the world, the Covid-19 pandemic is well behind us and the days of having to put on a mask before leaving the house, of only being able to meet up with certain people in specific circumstances and other weird (but certainly not wonderful) rules are now an increasingly distant memory.

While the pandemic might be in the past many of the ripples it made in the global ecosystem are still being felt, and according to Xiaohui Wang, Deputy General Manager, International Marketing, SDLG, at least one of these ripples has been positive for the company. When countries around the world were locked down China opened up quickly. Due to this and supply chains still functioning, China-based OEMs like SDLG were able to supply equipment to customers when other manufacturers were struggling to meet the orders they had.

This meant that some contractors, that might have been sceptical about using Chinese equipment, tried it for the first time. For a company like SDLG that sells excavators, wheeled loaders, and backhoe loaders, among others, this was a huge opportunity.

Impact of the pandemic

“From the last three years one of the biggest changes is the customers that tried our products. Because, before Covid 19, some customers still had concerns of quality and if it was good enough compared with Japanese or Western brands,” reveals Wang.

“During this period of time, we gained a lot of customers’ trust because they’re using the machines. They saw they were reliable and they could have the same expectations as with Western brands.”

Of course, Chinese brands were selling in overseas markets before Covid, and to an increasing extent, but Wang believes that the pandemic was a catalyst. Many China-based OEM such as XCMG, Sany and LiuGong have announced large percentage increases in overseas sales in recent financial results and SDLG is no different, with sales in these markets up approximately 35-40% over the last few years.

Wang says that the company now exports into 114 countries around the world. Obviously, growth of over a third is unsustainable, longterm, but Wang says to consolidate the OEM is looking to “expand our dealer network coverage” as well as set up “legal entities” in certain countries and have more local production in Brazil, India, and Mexico.

Xiaohui Wang, Deputy General Manager, International Marketing, SDLG

Regarding electrical machines, in China, we are growing fast

Electric power

The research and development section of SDLG is one of the busiest in the company, with the OEM recently developing a full electrical control system which, among other benefits, improves fuel consumption, and a new transmission system for wheeled loaders. One of the big areas that they – and the rest of the industry – have been working on is electric power.

Wang claims that China-based OEMs can offer electric machines, such as compact wheeled loaders and excavators at a cost of, “around 40%” less than Western-based OEMs due to greater availability of materials and government-related assistance. He also points out the lower running costs of electric models and that, while the initial cost may be more than a diesel-powered equivalent, they save customers money in the long-term. The global market for sales of electric construction equipment hovers around the 1% mark – in China, Wang says that the market for electric wheeled loaders is approximately ten times this at 10%. “Regarding electrical machines, in China, we are growing very fast,” he asserts.

When it comes to electric wheeled loaders, he says that they have, “very specific working conditions” such as in ports, heavily urbanised areas, and are also being used in the construction of numerous “clean energy” projects. The number one driver for the growth in electric construction equipment, says Wang, is the government. He adds that, due to a low total cost of ownership, if the initial price of electric machines can reduce then they will be even more appealing. Speculating on the future, he says, “Looking at the global market in the next three or five years, electric conversions on construction equipment industry will be around 3% to 5%.

“I believe in 2030 it will be around 10% globally. This relies on the cost, how we can reduce the electrical machine cost, and how we can build up charging stations – especially in the mining segment because they need more oil consumption than the rest of the application.”

Whether sales of electric construction equipment can reach the levels that Wang is talking about remains to be seen, but what it not in doubt is the global ambition of SDLG. He mentions a strategy of different parts – the initial stage is entering new markets, then building a customer base and structures. The final part is localisation, employing more local workers and having local production. 

SDLG’s electric wheeled loader, L956HEV-1

Wang says that the company is somewhere in “stage two” and work is being done on a “global supply chain and increasing the coverage of the global dealer network.”

The last few years have brought about great change for China’s OEMs – it will be fascinatingng to see what the next few years entail. IC