So, how exactly did the excavator market perform in 2021? What about the brand landscape and overseas performance? Where are the future opportunities?

　　Analysis of 2021 Full-Year Excavator Sales Data

　　Dynamic Analysis of Full-Year Excavator Data

　　01

　　Overall Excavator Sales – High-quality Development with Steady Growth

　　Against the backdrop of a stable national economy and a high base of growth in the previous year, the excavator industry maintained steady progress in 2021.

　　According to statistics from 26 excavator manufacturers by the China Construction Machinery Association, a total of 342,784 excavators were sold from January to December 2021, up 4.63% year-on-year. Of these, 274,357 units were sold domestically, down 6.32% year-on-year, and 68,427 units were exported, up 97% year-on-year. In December 2021 alone, 24,038 excavators were sold, down 23.8% year-on-year, including 15,423 domestic sales (down 43.5%) and 8,615 exports (up 105%).

　　Looking at sales over the past five years, 2017 saw a doubling of year-on-year growth, reaching a historic high. Growth remained positive in subsequent years, but slowed to single digits in 2021.

　　Despite constraints such as a high base, rising raw material prices, component supply shortages, and increasing export costs, the industry trended downward in the second half of the year. However, accelerated issuance of special government bonds and breakthroughs in products, technology, and overseas markets strongly supported high-quality development, keeping the industry on a stable growth track for the full year.

　　02

　　Domestic Excavator Sales – Strong Start followed by Weakening

　　In terms of monthly domestic sales in 2021, growth turned negative for the first time in May, and remained in double-digit decline through December.

　    ◆ January: 16,026 units sold domestically, +106.6% year-on-year;

　　◆ February: 24,562 units, +256% year-on-year;

　　◆ March: 72,977 units, +56.6% year-on-year;

　　◆ April: 41,100 units, -5.24% year-on-year;

　　◆ May: 22,070 units, -25.2% year-on-year;

　　◆ June: 16,965 units, -21.9% year-on-year;

　　◆ July: 12,329 units, -24.1% year-on-year;

　　◆ August: 12,349 units, -31.7% year-on-year;

　　◆ September: 13,934 units, -38.3% year-on-year;

　　◆ October: 12,608 units, -47.2% year-on-year;

　　◆ November: 14,014 units, -51.4% year-on-year;

　　◆ December: 15,423 units, -43.5% year-on-year.

　　The “strong start, weak finish” pattern in 2021 was mainly driven by: demand overhang from the previous year’s high sales, surging raw material prices, delayed construction, and the end of the peak replacement cycle.

　　03

　　Excavator Exports – Sustained Growth and Accelerated Globalization

　　In contrast to the sluggish domestic market, overseas demand boomed. Thanks to effective pandemic control, Chinese brands quickly filled gaps in the global market. With accelerated internationalization and expanded overseas projects, export sales grew steadily for 12 consecutive months, with the lowest monthly increase at 57.9% and the highest at 166%.

　　◆ January: 3,575 exported units, +63.7% year-on-year;

　　◆ February: 3,743 units, +57.9% year-on-year;

　　◆ March: 6,058 units, +116.5% year-on-year;

　　◆ April: 5,472 units, +166% year-on-year;

　　◆ May: 5,150 units, +132% year-on-year;

　　◆ June: 6,135 units, +111.5% year-on-year;

　　◆ July: 5,016 units, +75.6% year-on-year;

　　◆ August: 5,726 units, +100% year-on-year;

　　◆ September: 6,151 units, +79% year-on-year;

　　◆ October: 6,356 units, +84.8% year-on-year;

　　◆ November: 6,430 units, +89.0% year-on-year;

　　◆ December: 8,615 units, +105% year-on-year.

　　Looking back at recent years, overseas markets have become a new growth engine for Chinese manufacturers. In 2016, export growth accelerated again, with excavator sales up 20.6% year-on-year. From 2017 to 2019, exports maintained strong growth, with foreign brands also increasing production in China for global supply. In 2020, despite the pandemic, exports still grew year-on-year. Notably, China became the world’s largest machinery exporter in 2020, surpassing Germany, with machinery exports of around €165 billion and a 15.8% global share. In 2021, Chinese brand exports surged again by roughly 100%, with domestic firms growing by over 120%.

　　Today, Chinese construction machinery giants that have outperformed in the domestic market are confidently expanding globally. With the 14th Five-Year Plan and the Belt and Road Initiative, improved overseas sales and financing channels, and an optimized global supply chain, Chinese construction machinery exports will achieve even better results.

　　04

　　Excavator Segment Market – Increasing Competition in Medium Excavators

　　By product structure:

　　From January to December 2021, domestic sales of small, medium, and large excavators were 163,000, 78,000, and 34,000 units, with year-on-year changes of -8%, +1%, and -13%, accounting for 59%, 28%, and 12% of the market respectively.

　　Notably, while small excavators still dominate sales, medium excavators have outgrown small ones for months since 2020, reaching a high share in recent years. This reflects strong demand in roads, railways, real estate, and infrastructure.

　　In terms of market concentration (Jan–Nov): small excavators (CR4 70.6%, CR8 85.9%), medium excavators (CR4 57.2%, CR8 75.7%), large excavators (CR4 62.4%, CR8 82.4%). Competition is fiercest in medium excavators, while small excavators are highly concentrated with a few leading players.

　　Large excavators, with high technical barriers and R&D costs, have long been dominated by top enterprises. For medium excavators, rising technical capabilities have allowed Chinese brands to upgrade rapidly, intensifying competition between local and foreign firms. Small excavators, a strength of Chinese brands, show a clear “strong get stronger” pattern.

　　05

　　Excavator Operating Hours – Declining in Line with Sales

　　Average operating hours are a key indicator of downstream construction demand and industry trends.

　　According to Komtrax data from Komatsu: in November 2021, operating hours for Komatsu excavators in China were 109.7 hours, down 19.5% year-on-year, with a slightly narrower decline than October.

　　Operating hours from April to December 2020 rose compared to 2019, boosting end-market demand. However, hours started falling in April 2021, with average declines exceeding 16% year-on-year from April to November.

　　The downward trend in operating hours mirrors weaker sales, reflecting lower customer purchasing intentions. The dual decline in sales and operating hours also highlights intensifying competition in the domestic excavator industry.

　　Chinese Brands Rising Strongly – The Strong Get Stronger

　　With an improved industry environment and stronger corporate strength, Chinese excavator brands have risen rapidly, while foreign brands have gradually been marginalized.

　　Data for January–November 2021 shows: Chinese brands sold 205,554 units domestically, up 8.4% year-on-year, with a 79.4% market share. Foreign brands sold 53,380 units, down 29.7%, with a 20.6% share. CR4 was 64.5%, CR8 81.2%.

　　Over the past five years, the domestic market has transformed dramatically. In 2016, Chinese brands held only about 36% of the market (CR4 48.3%, CR8 70.4%). By January–November 2021, this share had risen to 79.4%.

　　These five years demonstrate a clear trend: the excavator industry is becoming more concentrated, with the strong getting stronger. Chinese brands have expanded sharply while foreign brands have retreated, creating an approximate 80:20 market split. Chinese excavator brands have gone from minor players to market leaders.

　　Industry Outlook

　　The Ministry of Finance has issued a 2022 new special debt quota of 1.46 trillion yuan. Combined with local government bonds issued by the end of 2021, total volume will exceed 2 trillion yuan, providing strong financial support for stable economic growth in Q1 2022.

　　Domestic excavator sales are expected to decline moderately in 2022. If exports grow by over 50%, they could offset a 10%–25% drop in domestic sales. Full-year 2022 sales may reach around 310,000 units, down roughly 10% year-on-year. A further correction is possible in 2023, but a sharp cliff-like decline is less likely in the coming years. By model, large excavator demand is expected to fall more significantly, while medium and small excavator markets will remain relatively stable.

　　Going forward, construction machinery demand will be supported by fading pandemic impacts, improved technology, optimized supply chains, faster project approvals, special bond issuance, stricter environmental policies, greater machine-for-labor substitution, and the spread of 5G, big data, and industrial internet.