Winnipeg Free Press - ONLINE EDITION

China gears up quality

  • Print

Until now it widely has been assumed that construction equipment made by Chinese companies, and even equipment made in China by the leading foreign firms, was inferior in both quality and technology to gear produced in the foreign firms’ factories back home.

These assumptions have been crushed by a new study from C.L.S.A., a broker which tested a range of Chinese-made diggers and found them to be sturdy and high-performing. Leading Chinese brands such as Liu Gong, Sany and Zoomlion, whose products also have the advantage of being cheap, soon will be invading building sites around the globe.

Things have changed drastically since the global financial crisis five years ago. Until then around 90 percent of the diggers on Chinese building sites were foreign-branded, albeit often made inside the country. The government’s huge fiscal stimulus, in 2008-2009, triggered a construction boom which encouraged existing Chinese makers to expand and spurred dozens of new firms to enter the market. The local firms lacked the technical know-how of Japan’s Hitachi and the extensive product range of America’s Caterpillar, but they offered buyers such generous discounts and financing that by 2011 they had grabbed half of the domestic market.

As they have expanded, the best Chinese firms have rushed to upgrade their technology by buying, or entering joint ventures with, foreign competitors and suppliers. Sany Heavy bought two German firms, Putzmeister and Intermix, and entered a joint venture with Palfinger of Austria. Zoomlion bought C.I.F.A. of Italy. Liu Gong and Xugong formed joint ventures with, respectively, America’s Cummins and South Korea’s Doosan to improve their diesel engines.

As the effect of the government’s stimulus has faded, demand for construction equipment has softened. Thus the foreign firms, which hitherto had been producing relatively low-tech "made in China for China" products in their local factories, increasingly have switched to making more sophisticated ones for export, in particular to southeast-Asian countries.

C.L.S.A.’s researchers subjected Chinese-made diggers from six companies — Caterpillar, Doosan, Hitachi and Sany, as well as Kobelco and Komatsu of Japan — to two weeks of grueling tests of their productivity, durability and fuel efficiency. They all came out well, but most striking was the performance of Sany’s machines. Though not quite as good as the best, made by Caterpillar, they outperformed their Japanese and Korean rivals.

C.L.S.A. concluded that technology gaps between the best Chinese firms and their foreign rivals are now "almost nonexistent." It predicts that Sany and a handful of other larger Chinese brands will lead a consolidation of the local industry, in which 60 firms will become perhaps six.

The firm’s test makes an interesting contrast with a similar exercise in February, in which Sanford C. Bernstein, a research firm, stripped down two leading models of Chinese-branded cars to examine their build quality. In this case the Chinese firms were found to be still lagging their foreign rivals.

Chinese companies have not yet learned how to make world-class cars, in short, but they have now worked out how to make top-quality construction equipment at attractive prices. Their foreign rivals should be worried.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Public finally sees inside the Museum for Human Rights

View more like this

Photo Store Gallery

  • A Yellow-bellied Sapsucker hangs out on a birch tree in St. Vital. The Yellow-bellied Sapsucker is considered a keystone species. Other species take advantage of the holes that the birds make in trees. A group of sapsuckers are collectively known as a
  • A gosling stares near water at Omands Creek Park-See Bryksa 30 day goose challenge- Day 25– June 21, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Do you think Judy Wasylycia-Leis will greatly benefit from the endorsement by Winnipeg's firefighters?

View Results

View Related Story

Ads by Google