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China's construction machinery industry urgently needs "asset slimming"

China's construction machinery industry urgently needs "asset slimming"

  • Categories:Industry News
  • Author:
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  • Time of issue:2019-11-19
  • Views:138

(Summary description)In the latest list of the top 50 global construction machinery manufacturers released in 2015, the companies included in the list were from the United States, Japan, China, Sweden, Germany, South Korea, Finland, the United Kingdom, Italy, France, Austria, Switzerland, Canada, South Africa and India15 country.

China's construction machinery industry urgently needs "asset slimming"

(Summary description)In the latest list of the top 50 global construction machinery manufacturers released in 2015, the companies included in the list were from the United States, Japan, China, Sweden, Germany, South Korea, Finland, the United Kingdom, Italy, France, Austria, Switzerland, Canada, South Africa and India15 country.

  • Categories:Industry News
  • Author:
  • Origin:
  • Time of issue:2019-11-19
  • Views:138
Information

In the latest list of the top 50 global construction machinery manufacturers released in 2015, the companies included in the list were from the United States, Japan, China, Sweden, Germany, South Korea, Finland, the United Kingdom, Italy, France, Austria, Switzerland, Canada, South Africa and India15 country. By country, China's return on assets is only 0.63%, which is only higher than India and South Korea.

What does this number mean? A simple comparison may be more direct. The benchmark one-year deposit interest rate for commercial banks recently announced by China is 2.5%. The extreme understanding is that a return on assets of 0.63% means that money is invested in the construction machinery industry, and the one-year return is not as good as that stored in banks.

Such a low number is partly because the profits of Chinese construction machinery companies have been greatly reduced due to macroeconomic impacts, and partly because the assets are too large. The data shows that on the 2015 global construction machinery manufacturers list, the operating profit of 11 Chinese companies is only 8% of that of 6 US companies, but the total assets are more than half of the latter. Compared with Japanese companies, the results are even more amazing. The profits of 11 Chinese companies are equivalent to 11% of 11 Japanese companies, but the total assets of Chinese companies are 1.2 times that of Japanese companies.

There is no doubt that the asset scale of Chinese construction machinery manufacturers can even be called "asset burden" is too heavy. This kind of "load bearing" has its historical factors: China's construction machinery industry as a whole is in a rapid growth period and has been in the ultra-high-speed growth for a long time in the past. The manufacturing system, marketing channels, and personnel expansion are inevitable. However, as the Chinese economy and the Chinese construction machinery market return to rationality and fall back to the "medium-high-speed" growth range compared to the past, the development model built on the basis of high growth in the past is gradually failing. Facing the reality of low growth, enterprises must build a new development model and business system. It is imperative to reduce staffing, shrink production capacity, and integrate and restructure.

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