China’s Changing Construction Equipment Industry Implications for International Powertrain Suppliers

China’s construction equipment (CE) market has been shrinking since 2011 with only few machinery segments gaining sales in last few years. Most of China’s CE machinery segments are already highly concentrated with few major Chinese CE OEMs contributing the majority of sales volume in each machinery segment. Machinery segments with more advanced technology such as crawler excavators see the rise of Chinese CE OEM competing with their international peers on market shares. Chinese full-liner OEMs are expected to shift their global M&A strategies in light of China’s enforced governmental control of capital outflows and increased scrutiny over the authenticity and compliance of overseas investments. With this market and competitor dynamics in China, the key question for international CE powertrain system and component supplier is how Chinese CE OEM and engine supplier develop and source their key powertrain components in future.