Can China's mega-cranes find success?
Can Chinese heavy crane manufacturers find global success?
For crane watchers at bauma China in Shanghai last year, there was a concentration of large tonnage cranes not normally seen in one space, including Sany’s 3600t crawler crane, Zoomlion’s 2000t ATC, and XCMG’s 1000t lattice boom truck crane, as well numerous flat top tower cranes.
But for these heavy lifters, while it’s clear that Chinese manufacturers have met success in their domestic market, it’s unclear whether they will meet equal success in the international markets.
As far as smaller cranes go, particularly rough terrain cranes, truck cranes and smaller crawlers, Chinese brands are making headway in the Middle East, evinced by purchases by National Oil Companies of RTs for use in the oil fields.
But, as the cranes (and their price tags) get larger, the market gets tougher, with buyers more demanding of tried and tested products.
Speaking to European crane manufacturers at Shanghai, and after the show, one consensus was that the quality levels on show had improved noticeably since the previous show two years earlier.
“I recognise that their quality has improved since [Bauma China in 2010],” said Rüdiger Zollondz, director of product marketing, Terex Cranes.
“I also have the feeling that they are putting a lot of effort into producing good looking products. They have started to have more styling in products, which can be seen at the show.”
Chinese manufacturers have also had to respond to demands from customers in the domestic market to build safer cranes he said.
Christoph Kleiner, managing director of Liebherr-Werk Ehingen, said that Chinese manufacturers have made significant steps, though he noted that internationally at the moment there had been no success in the very heavy classes.
“You see some cranes in the range of up to 600 tonnes, which is considered to be large as well. And having in mind they came from, not long ago, being zero, to being in this class, is a remarkable achievement. And maybe everything is going a little bit too fast... people outside of China are not necessarily really trusting these machines.
“Another proof on this is that during the peak times of 2007-8 you could not get the larger cranes, and some customers in South America and Africa bought [Chinese cranes instead]. But they returned to known Western products after they became available again.”
Kleiner says that in terms of product development, crawler cranes can be simpler to design and build than all terrain cranes, where the limitations of on-road permissions is one of the key limitations.
“With different global requirements on road permissions [...] the challenge is to have this complex and versatile all-terrain crane, with different counterweight configurations to match all these local road regulation requirements, to get a license plate at the end.”
Tower cranes were prolific at bauma Shanghai, mand any of them were flat tops. Martín Echevarría, sales director at Linden Comansa, says that Chinese manufacturers of tower cranes are expanding their presence steadily.
“The Chinese tower cranes manufacturers are already making an important impact in Middle East and in BRIC countries, and even a small impact in Europe.
“The price is obviously attractive, but the quality of most manufacturers is poor if you compare them to European manufacturers for example.
“Anyways, there are still many buyers, even in Southeast Asia and other countries with much influence from Chinese manufacturers, that still demand high quality tower cranes such as Linden Comansa’s. They know they can rely on our tower cranes without any fear.”
Eric Etchart, president and general manager of Manitowoc Cranes, said that one reason why their Potain tower crane brand is so successful is due to the proven values of its cranes.
High residual value has not been so important in the Chinese market, said Etchart, because many rental companies are competing on rates, though he believes that this business model will change over time.
“[Globally] the brand recognition and the resale value is extraordinarily critical.
“I think it will take some time for the Chinese to get their brands recognised world-wide, and to be able generate this capital gain when they resell them.”
However, said Etchart, the Chinese brands are obviously improving quickly, and therefore the pressure is on the international brands to continue to improve their products.
“We have our feet on the fire to continue to bring technology and upgrade our technology, and a lot of innovation has to go into the product.”
While there was an impressive range of cranes on display from Chinese manufacturers at bauma China, there was talk too of copying. Asked whether Manitowoc would pursue Chinese manufacturers in a case of copyright infringement, president Eric Etchart was clear where the company’s priorities lie.
“While China is devoting a lot of resources and engineering, I think the focus so far has been more towards reverse engineering of the European or American technology, instead of really innovating.
“I think that is a first step. You can anticipate that we will see the Chinese manufacturers coming up with true innovation, that will be patented.
“To be honest, I am looking forward to this, because I am sure that’s going to change the mind set of manufacturers. Once they have their own patents, they will probably be more concerned about not infringing the patents of the other people,” he said.
“A patent is the result of a lot of investment in terms of R&D, engineers, and yes we do have some frustrations, and I think that it’s our fiduciary responsibility to take actions.
“[Taking actions] in China is more difficult, but it’s doable in the international markets.”
However, he was careful to clarify that it was not a China-specific issue, noting that Manitowoc had itself accidentally infringed patents of competitors whch it had then settled for, and had taken actions against European competitors for copyright infringement as well.
“It is not about the American or European manufacturers against Chinese manufacturers, it’s just protecting our patents.”