CHINAPAY.COM19September2000StrictlyPrivate&ConfidentialIntroductionThefollowingreportisbasedontheanalysisfromtheextensiveprimaryandsecondarydataattainedfrommarketresearchactivitiescarriedoutbyPricewaterhouseCoopersShanghaioveranearlytwoweeks.Ourmarketresearchmethodscomprisesecondaryresearchofcollectingmarketandindustryinformationfromindustryassociations,publiclibraries,internet;andover20telephoneinterviewswithengineeringmachinemanufacturersandrelativetradecompanies,governmentdepartmentsandindustryassociationsasprimaryresearch.Basedontheinformationcollectedandourownin-depthmarketanalysis,wereachedsomeconclusionsandsomeestimations.Restrictedbytimeandbudget,wecouldnotdevelopacomprehensiveprimarystudy,butmainlylearnupondesktopresearchandonlyconductedalimitednumberoftelephoneinterviews.Priortothestudy,wehelddiscussionswithpeoplefromHongqiinordertodeterminethekeyissuesweshouldtargetonandwhatweneedtoachieve.Ourresearchinvolvedbulldozer,excavator,loader,rollsfarmmachineandcastingiron,focusingondemand&supply,marketsize,productstructure,andprice,etc.Consideringthelimitedinformationsources,wemadesomeproperadjustmentintheprocessofproducingmarketestimates.Chineseengineeringmachineryindustryhaskeptanaverage8.1%increasingrateinthepastfiveyears.Bytheendof1999,thesalesrevenueofcompletebusinessindustryreached30.4billionRMB.1994-99IndustryRevenue20.521.322.123.824.730.4billion(Rmb)2005ForecastingMachine19992005CAGRBulldozer3234600010.8%(above100hp)Excavator61111200023.3%Loader19000270004.7%AverageCAGR~9.2%CAGR8.1%CurrentSituationMarketDriver2005ForecastingChineseengineeringmachineindustrykeepanincreasingratearound8%ThefutureofChineseconstructionmachineryisquitepromising.Accordingtopreliminaryestimation,byyear2005,varioussectorsofnationaleconomywillneedthefollowingquantityofmajorconstructionmachinery.Transportationofnaturalgas&electricityfromwesttoeastConstructionofXi’an--Nanjing&Chongqing--Huaihuarailway.Constructionofmorethan10airportsinwesterncities.KaliumfertilizerdevelopmentprojectinQinghai.Constructionofuniversityandcollegecampusesinwesternarea.Bulldozer1MainProductsinbulldozermarketT140-1SD6DD6DmanufacturerXunhuaConstructionMachineryGroupxuanhuaConstructionMachineryGroupAnshanpowertransmissionmechanicalhydraulichydraulicpower(HP)140140140technology80stechnology80stechnology90stechnologybucketvolume(m3)43.34.6price(RMB)338000368000380000T12021.4%T14044.5%T1608.5%T1800.8%T22022.7%T3201.8%T2000.3%T12022.9%T14043.1%T1607.4%T1801.3%T2000.2%T22023.4%T3201.6%•Chinayieldabout3200bulldozersannulinrecentyears.Trackbulldozerwinaadvantageover90%.•Statisticsof1998showedthatbulldozerof140,120,220and160HPwerethebestsellersinthemarket.,thefourtypesoccupied97.1%inall.•T140showeditsmarketpreferencebothinoutputandsalebynearly45%marketshare.•Rollerbulldozerkeptalimiteddemandinthewholecountry.Itonlyhad100outputin1998.•AccordingtoinformationfromEngineeringMachineryAssociation,thedemandfordifferenttypeswillferociouslychangeinthenextfewyears.Particularly,themarketwillprefer140--160HPbulldozers.OUTPUTSALESBulldozer140~160HPHaveanincreasingdemandinChinaKeycompetitorin140--160HPCurrently,XuanhuaEngineeringMachineryCo.Ltd.,playsadominantroleinthemarketof140HPbulldozer,occupyingmorethan70%.Bycomparison,D6DbulldozerofAnshanhasadvancedtechnologyandlargerpowerthanT140bulldozerofXuanhuaEngineeringMa...