Skip to main content

Intermat made one thing clear: Chinese OEMs are going hard and fast in Europe

Commercial Vehicles

May 2024

ALASTAIR HAYFIELD

Vice President of Research - Commercial Vehicles

Alastair has over 15 years’ experience leading research activities in scaled, high-growth industrial and technology markets. As Vice President of our Commercial Vehicles Division, he’s responsible for cutting-edge research on electric trucks and buses, autonomous trucks and off-highway electrification.

  • Strong showing of electric machinery by Chinese OEMs
  • Not ‘inhibited’ by policy direction
  • Underscores growing export business, tariffs might be inevitable

On the official Intermat 2024 website it states: “The 1,065 exhibitors, including 68% from outside France, went back home with a lot of new contacts as they had an average of 30% more contacts per day per exhibitor compared with 2018 edition.”

However, if you take a look at the 2018 event, there were nearly 1500 exhibitors. This year’s event at the Paris-Nord Villepinte exhibition center felt smaller, and it didn’t seem ‘busy’ from a footfall perspective. The challenge here is that Intermat runs the risk of becoming a ‘Tier 2’ event, with new product launches reserved for Bauma, Agritechnica or ConExpo. This seemed to be evident this year as, for example, there were very few new electric machines announced at the show and relatively little major participation from suppliers like Bosch, Continental or Danfoss.

For us, the most important part of the show was the strong presence of Chinese OEMs, particularly with electric solutions. While there is lots to talk about, we’ve chosen to show images from LiuGong and Sunward. Sunward was notable because of the mobile battery pack on tracks that can follow an excavator around a site. This is a concept we have not seen before and is another approach to addressing the issue of charging and operational performance.

LiuGong

Photos: taken at Intermat 2024.


Photo: taken at Intermat 2024.

Sunward

Photos: taken at Intermat 2024.

Many Chinese OEMs have close to a decade of experience with electric machines, alongside unfettered access to the most competitive electrification supply chain in the world. When it comes to supplying low or zero emission solutions, they are – to a degree – unencumbered by having to develop a range of powertrain options. European OEMs, by comparison, are left hamstrung by a lack of clear policy direction. Should they develop battery machines? Hydrogen ICE or fuel cell? Hybrids? The limited choice in China is a strength for OEMs since they can go ‘all in’ on electric in a way that European OEMs would struggle to.

Position of Chinese OEMs in Europe

Taking the French excavator market as an example, SANY is already a top five vendor. There are many other countries and product categories where Chinese OEMs are entering the top 10 within only a few years of establishing their European operations.

Part of the reason for this success has been pricing: Chinese built excavators are often cheaper than their European equivalents. At a time when margins in construction are wafer thin and the industry is in a downturn, this really does matter to contractors, who may feel no particular brand loyalty. Some within the industry are quick to point out quality issues. However, this feels like a shaky argument given the scale of production in China and the fact that Chinese companies often use the same sub-components as their European equivalents. It is fairer to suggest that there may not be the same level of aftermarket support/service, but even this is changing as Chinese OEMs make headway in providing service centers and dealer networks in other territories.

French Excavator Market Shares

Why are the Chinese pushing so hard?

In short: trouble at home. The Chinese domestic market has collapsed post-Covid, with weak residential construction creating a sluggish construction market.

Chinese Construction Equipment Market Forecast

As the table below shows, between 2021 and 2022 sales of excavators in China halved for SANY. This would represent an unprecedented collapse in business for any organization and so market conditions have prompted many Chinese companies to urgently pursue export opportunities.

Chinese Excavator Market Shares.

Is the answer tariffs?

Some manufacturers are openly ‘spooked’ by the rapid emergence of Chinese made products in Europe, with some commenting privately that tariffs may be the only option to protect European manufacturers. It is true that JCB, Manitou and Haulotte have initiated investigations in the UK (JCB) and within the EU (Manitou and Haulotte) to look at Chinese manufacturers’ products being ‘dumped’.

It isn’t clear at this point what the outcomes will be of these investigations. Memories of the solar industry and existential concerns about Chinese made EVs will be present in European regulators’ minds. But there should be caution in case there are retaliatory tariffs that impact the export of European made products or that potentially hamper the ability of countries in Europe to meet net zero goals.

The outcome is very finely balanced at this point. Depending on the aggressiveness of both Chinese expansion and lobbying by European manufacturers, tariffs could be inevitable.

If you want to learn more about our off-highway research and imports from Chinese machine manufacturers, review our latest Off-Highway Vehicles – 2024 report or contact Alastair Hayfield directly.

Leave a Reply