Construction Machinery: EU IIIB Engine Standard Cuts Domestic Profits

From January 2011, the European Commission will implement Stage IIIB emission standards for diesel engines with non-road mechanical power ranging from 130kW to 560kW. The EU IIIB phase emission standard limits the emission particulates of the engine from 0.2 g/kWh to 0.025 g/kWh. In order to meet this standard, diesel engines must be equipped with particulate filters.

Engine and hydraulic parts are the two core issues of construction machinery. In these two aspects, Carter has world-leading technology. On the other hand, the domestic market, the degree of localization of engines and hydraulic components is not high, most of them need to be imported, even though they are headed by Xugong. Some of the companies have made breakthroughs in engines, but at this stage they are far from being able to achieve their own level of use. This means that it is impractical to talk about exports at this stage. The issuance of this emission standard has little impact on the current domestic market's exports.

Although it can not affect exports, it can affect imports. Most of the imported products are international brands. They belong to high-end products in terms of quality, performance, and price. The issuance of emission standards will undoubtedly increase production costs of manufacturers and increase export prices. This will be a major challenge for Chinese manufacturers. The increase in procurement costs will further reduce the profitability of China's construction machinery products and weaken the international competitiveness of products. The market space cultivated by price advantage will encounter standard attacks.

Relevant data show that in the first half of 2010, using excavators as an example, foreign brands such as Japan and South Korea remained dominant in the domestic market, and the total foreign-invested market share reached over 70%. Although domestic companies' production factors have been effectively improved, they are still inconsistent with the world's largest market. The strategic structure and competitive structure of enterprises still need to be improved.

Industry experts pointed out that only product upgrades can keep up with the standard update, in order to capture the commanding heights of the market. At present, most domestic companies are still at the stage of product production. Only a few brand enterprises are doing technology. The future development of enterprises should be a standard enterprise. Therefore, in the increasingly fierce international competitive environment, domestic enterprises should The important factors in the future - environmental protection and energy conservation are breakthroughs, and we should try to stay in the front section of the market to avoid being eliminated by increasingly new standards.