Interview: Yuchun Zhang

Chinese crane exports have more than doubled, from 400 in 2005 to more than 1,000 in 2006. Cranes were not only exported to Asia, Africa, but also to Australia, North America and Europe. The construction equipment trade surplus reached RMB1bn for the entire market in 2006. Although China has become a net exporter of construction machinery as a whole, it is still a net importer of cranes (contrary to an incorrect news article that confused these two concepts in Cranes Today May, p14). Xuzhou Heavy Machinery Co and Zoomlion Puyuan have completed CE certification for some cranes, and are moving into the European market.

LW: What role does XHMC play in the international trade of Chinese products?

YZ: If our company doesn’t do something worthwhile in international markets, XHMC crane cannot really become the largest crane manufacturer, even if our cranes are the most popular in China.

So, the chairman of XCMG, Min Wang, emphasised ‘going out of the country gate’ as early as the beginning of 2002, and he put forward detailed strategic plans for international development of XCMG in 2004. The most important item in his train of thought is how to let Chinese products possess a sense of quality, and not let price-setting alone guide production.

This quality has been created by us for four years, according to Chairman Wang's ‘Three high and one big’ plan: high technology, high reliability, high residual value and large capacity product. We are quickening our response speed to foreign merchant demands, renewing our manufacturing systems and deepening our basic research. This process is very difficult, but it produces a market effect.

XHMC exported 800 cranes in 2006, 80% of them over 25t capacity. Export occupies 11% of total sales volume of XHMC. This is twenty times higher than other Chinese truck crane manufacturers.

The most welcome products abroad are 25t–70t capacity cranes. Currently, demand for these tonnages exceeds supply. 80t, 100t and 130t truck cranes exhibited at Bauma China 2006 are also being exported. Truck cranes over 100t are seldom seen, they are very welcomed.

The Middle East is our largest exporting region, reaching 400-odd units yearly. This is because of unimaginably rapid development in the region. The second largest exporting region for us is South Africa, then South America and then Oceania. The market share of our crane reaches around 70% or so in the Middle East and South Africa. The market share in Australia is 20%-30%. We hope that our share of the international market will be 30% and above towards 2010.

There are some changes in attitudes to cranes in world markets. In the past, the countries in South America preferred only cranes from the USA, and other countries from the Middle East and Asia preferred Japanese cranes. Now, with Chinese crane developments, foreign users are also beginning to approve Chinese product. As one of China's biggest manufacturer of cranes, our products are more and more welcomed by foreign users. Furthermore, the price of Chinese cranes also has a strong competitive force above the foundation of the same performance and quality. This makes the market shares of international manufacturers drop.

LW: How does XHMC ensure parts supply and after-sales service overseas?

ZW: XHMC set up a healthy and good operating service network in China, but we still have some shortcomings in this aspect. This is also the focal point of our future work. Now, XHMC has established an international user’s service centre, and has appointed dealers and distributors in nine countries. We are utilising these nine overseas points to establish user service centres initially and to link up with the user service centre at our headquarters.

The total output volume of XHMC occupied 10% of world total output volume in 2006. This not only did credit to Chinese national enterprises, but also set a precedent of large-quantity export for Chinese cranes.

Yuchun Zhang, general manager of Xuzhou Heavy Machinery Co (misidentified as XCMG chairman Min Wang in Cranes Today December 2006, p25). Yuchun Zhang