KHL International Construction Magazine Interviews Wang Xiaohui, Vice General Manager of SDLG

In a recent publication by "International Construction," a leading magazine in the global construction?machinery information field under the KHL Group, an important interview was conducted with Wang Xiaohui, Vice General Manager and General Manager of the International Marketing Company at SDLG.?Mr. Wang engaged in an in-depth discussion with the KHL IC editor-in-chief?regarding the impact of the pandemic on Chinese construction?machinery OEMs, the prospects for the development of electric-powered equipment, and the company's global?strategy.?

Impact of the pandemic

While the pandemic may seem like a distant memory for many, its effects continue to reverberate throughout the global landscape. According to Wang Xiaohui, one of these effects has been surprisingly beneficial for the company. As countries around the world went into lockdown, China swiftly reopened, allowing China-based OEMs like SDLG to maintain their supply chains and fulfill customer orders while other manufacturers struggled. This provided an opportunity for contractors who may have been hesitant to use Chinese equipment to try it for the first time, presenting SDLG with a significant advantage in the market.?

Discussing the impact of the pandemic, Wang highlights a notable shift in customer perceptions over the past three years. Prior to Covid-19, some customers had reservations about the quality of Chinese equipment compared to Japanese or Western brands. However, during the pandemic, as more customers began using SDLG machines, they gained trust in the reliability and performance of Chinese equipment, equating it with that of 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.?Currently, SDLG's products are exported to 114 countries worldwide. Like other Chinese OEMs, SDLG experienced significant increases in overseas sales, with growth rates of approximately 35-40% in recent years. While such rapid growth may not be sustainable in the long term, SDLG remains committed to consolidating its position in the global market by expanding its dealer network, establishing legal entities in key markets, and increasing local production in countries like Brazil, India, and Mexico.?These initiatives aim not only to enhance SDLG's competitiveness in the global market but also to lay a solid foundation for the company's long-term development.?

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Electric Equipment

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 wheel?loaders. One of the big areas that they – and the rest of?the industry – have been working on is electric-powered equipment.

Wang claims that China-based OEMs can offer electric machines, such as compact wheel?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 wheel?loaders is approximately ten times of this at 10%. “Regarding electric?machines, in China, we are growing very fast,” he asserts. When it comes to electric wheel?loaders,?he says that they have, “very specific working conditions” such as in ports, heavily urbanized 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 electric?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.?

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Global?Strategy

In terms of global?strategy, Wang mentions a strategy of different parts – the initial stage is entering new markets, then building a customer base and structures. The final part is localization, employing more local?workers and having local production. 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 fascinating to see what the next few years entail.?

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As the world emerges from the shadow of the pandemic, the enduring positive impacts on China's construction machinery industry, alongside the swift advancement of electric-powered equipment and the unwavering commitment to internationalization strategies, stand ready to better enter into the?global construction equipment market in the forthcoming years. SDLG, as it advances on its path towards internationalization, is primed to adjust to evolving market dynamics and seize emerging opportunities. With a promising future ahead, SDLG epitomizes the potential within China's construction machinery sector.?