There are about 100,000 excavators sitting in inventory in China, an amount roughly equivalent to projected 2012 sales in the country.
China’s capacity for making heavy earthmoving equipment is now running at double annual global demand.
UK industry research group reports that China’s capacity for manufacturing excavators is now at 600,000 units a year. Global demand is only around 300,000 units.
Local Chinese demand for excavators has cooled with the government curtailing construction projects, Bloomberg reported. Demand fell 25 per cent in November alone, according to Off-Highway’s research.
There are about 100,000 excavators sitting in inventory in China, an amount roughly equivalent to projected 2012 sales in the country, Bloomberg quotes Off-Highway managing director David Phillips as saying.
Phillips describes the global glut of construction equipment as “very scary”.
Earlier this month The Australian Financial review reported that the cooling of the mining sector in Australia was producing a marked drop in prices for second hand equipment that had until fairly recently been commanding near-new prices.
Heavy equipment group WesTrac, owned by BRW Rich 200-lister Kerry Stokes, said in November the outlook for its China operations was uncertain and that it expected fewer heavy machinery orders in Australia for the second half of 2012-13.
WesTrac holds the rights to distribute Caterpillar equipment in Western Australia, NSW, the ACT and north-east China.
In September US-based Caterpillar said it expected “anaemic and modest growth” through until 2015.