Special machinery from the People’s Republic of China began to appear on the Russian market in the nineties, abot the same time both Russia and China embarked on the market path of development. Since then, the number of machines from the «Middle Kingdom» in the vast Russian expanses has grown year on year – and along with it the myths concerning these machines have multiplie. So to figure out, which of them are no longer relevant and in which cases they are still present, our correspondents went to investigate.
1. “PRODUCTS OF CHINESE ENGINEERING ARE TRADITIONALLY LOW QUALITY”
This common statement is pure myth and grows from the times of the “wild market” of the nineties, when special vehicles and trucks from the PRC domestic trade companies began to massively import into Russia – firstly the one’s that are cheaper: used and created exclusively for the domestic market of China, who was experiencing a construction boom at the time. The performance characteristics of those machines have for a long time ruined the reputation of PRC special machines among the Russian user.
At the same time, in the first decade of 21 century the situation on the Russian market has seriously changed: the construction business has ceased to focus exclusively on price and moved to carefully calculating the operating costs, including the cost of special machinery and spare parts, and the cost of moving materials. Here the Chinese manufacturers were able to provide Russian buyers with equipment that met their requirements: at a price slightly higher than domestic, but in terms of performance and comfort for the operator closer to the European models – while taking into account the Russian operating conditions. As a result, by the middle of 2000’s, even in distant regions from China, such as St. Petersburg and the Leningrad Region, the number of working dump trucks of Chinese production was 30% of the total number; a similar statistic was observed in the segment of front loaders. In general, the record for sales growth of Chinese special machinery and trucks came in 2007, when the volume of new machines increased more than sixfold in comparison with the previous year! Then the next wave of crisis hit the world, after – the crisis in China, associated with the oversaturation in the local housing market – which, of course, led to a decrease in the production of equipment in the PRC and a decrease in demand abroad.
However, even today, this country supplies the world markets with, by various estimates, from 10% to 15% of total construction equipment – and, given the Chinese scale of production, this is a colossal figure. For example, import of trucks of such popular brands as Sinotruk and Shacman in Russia net around 8000 units — limited mostly by what can be provided through local dealers keeping service obligations in mind. That is without considering simmilarly popular brand – FAW and Foton… Without digressing to the issue of quality, which will come later, we stick with quality considerations for now.
The technology of leading Chinese manufacturers is thoroughly tested at all stages of production, and then – a whole range of tests for strength and compliance with the rules established by the United Nations Economic Commission for Europe. The complex inspection of vehicles exported to Russia also includes tests for compliance with domestic standards: each such vehicle receives approval for sale, with confirmation of the relevant documentation issued by the Federal Agency for Technical Regulation and Metrology of the Russian Federation. A number of large corporations, such as JAC (name comes from Japan / America / China) already in the name itself declare orientation to foreign markets, as well as the use of innovative technologies and high-quality imported components.
2. “CHINA RECETLY WAS A FULLY AGRARIAN COUNTRY. TRADITIONS OF MACHINE-BUILDING ARE NON-EXISTENT, MUCH IS DONE “ON THE KNEN” WITH TRIAL AND ERROR
This is among the more ridiculous myths, stemming from mass ignorance of the world economy, history, and cultural development. Before the nineties of the last century, when the country began to move towards the market, China had a fairly powerful sector of production of construction and other special equipment, successfully covering the needs of the state with more than a billion people. So the world renown brand FAW – is nothing other then the former First Automobile Plant of the People’s Republic of China; and no less famous brand DongFeng -respectively, the ex-Second Automobile Plant… Both enterprises have worked for dozens of years on the state and, more importantly, on military orders (such a conservative structure as an unsuccessful car will not buy an army) – and have accumulated a greater, albeit somewhat specific experience in the production of construction, cargo and passenger equipment.
So, the first truck DongFeng – model EQ240 – descended from the assembly line in 1975 and was a creative remake of Russian Ural-375. Three-axle EQ240 with a wheel arrangement 6×6 weighed two and a half tons and could carry 12 people or 4.5 tons of cargo, depending on the assignment it was made for. It became the most massive army truck in the history of China, was modernized in the early 90’s and got the new name EQ 2080 – and was so passable and unpretentious in service that it was even exported to Peru since 1995 (export marking EQ2082E). For the Chinese this army machine was produced as EQ2081 and equipped with a Cummins engine. And today, on the roads of China, you can find a lot of these machines, looking somewhat archaic, but at the same time still very reliable.
Chinese enterprises that emerged in the market era did not have such experience – but they willingly studied and practiced the strategy of “small steps”: they did not pretend to leadership in the medium term, but they did not miss the opportunity to expand production and increase the supply on any occasion. And over time, developed to large export companies with a well-developed service network abroad. A typical example of such an enterprise is LUQING Machines, a plant founded in 1995. The company specializes in the production of front loaders; quantity-wise China leads the world in this segment. LUQING specialists found their niche, focusing on the production of small and medium-sized machines – from 1 to 5 tons. Today loaders of this brand are represented in a number of countries, including Russia, at the same time fully provided with spare parts, components and services based on dealer centers. At the same time there are dozens of such “middle players” in modern day China.
Of course, there are “nameless” enterprises out there, nobody outside of China knows what, producing equipment of dubious quality at a very low price and mainly for the domestic market. Such products have before massively penetrated into the Russian market at the turn of the century, and sometimes they still do, – but for the majority of construction companies they are no longer attractive: they know how expensive technology can be when bought at an extremely low price.
Of course, this does not mean that all Chinese brands, unknown or little known in Russia, are bad by definition. For example, the company CAMC, whose production machines we know little, produces a small range of special equipment at a very low price even for this country of origin. In addition, she has a decent build quality and a good supply of spare parts. The reason for its somewhat unrenown status is that the managment has not yet faced the need to invest in advertising, participation in exhibitions and infusion into the opening of large service centers with a full range of spare parts. When this happens – very attractive prices for CAMS equipment will inevitably catch up with the industry average.
3. “THEY HAVE NO NEW IDEAS AND TECHNOLOGIES IN CHINA. ALL ARE BORROWED – IN JAPAN, EUROPE AND THE USA “
Pretty peremptory, but not far from the truth. However, there are nuances that are of fundamental importance. One of them is the root of national psychology of this country. The Chinese have never considered shameful to learn, including – carefully copying the achievements of neighbors. At one point in time the Japanese came to study in China the sciences and arts; The era has changed – and the Chinese began to go to study in Japan, who have embarked on the western, industrial development path some decades before. The Chinese know that the moment when a student is superior to a teacher, one way or another, always comes.
Not surprisingly, in the engineering industry, the Chinese chose the same path. Many models of construction and lifting equipment produced in China are created in direct accordance with the western (more rarely – Japanese or South Korean) prototype and are stuffed with complex components (engines, hydraulic system components, etc.) made in Europe, Japan and the USA. At the same time, they are significantly cheaper than analogues from world leaders in production – the difference can be from 10% to 25%.
Another important question: what is truly Chinese, and what is not? For example, the Mitsuber brand. This technique is created by German developers with the participation of Russian investors, and direct production of loaders and other equipment is carried out at the largest state-owned plants in China, where the most advanced technologies are implemented and a six-level quality control system operates. In this case, each unit of such equipment has all the known marking Made in China.
Another example, this time – from the segment of lifting equipment. The joint Austrian-Chinese company PALFINGER SANY International Mobile Cranes Sales GmbH is headquartered in Salburg for the implementation of the advanced lifting technology Palfinger on the powerful production base of the SANY concern. The partnership is equitable, shares are distributed in a proportion of 50% to 50%. The joint venture produces crane plants and truck cranes – urban, short-wheel and off-road, on wheeled and caterpillar tracks, and also actively develops a segment of sales of second-hand equipment. Attractive prices and a wide dealer network, 100% service provision, including visiting brigades, 18-month warranty or 2250 hours – all of this is in stock, including in Russia.
Yet another example of such cooperation is the company CATERPILLAR QINGZHOU, LTD, the alliance of American Caterpillar and Chinese Shandong Engineering and Machinery, producing front loaders of various modifications, motor graders, crawler tractors and soil compactors. The equipment under the SEM brand has been delivered to Russia since 2009 and received good reviews in our country.
Thus, through the cooperation of efforts, the provision of its territory for the opening of factories of world leaders in the manufacture of special equipment, or even the direct purchase of Western enterprises together with technologies and production capacities, China is gradually absorbing advanced production technologies and creating decent samples of modern machines. Another 10-15 years ago, the “Chinese excavator” could cause irony among Russian builders, but today hundreds of these machines are successfully operating in our country. One of the leading companies of the People’s Republic of China – XCMG – impresses visitors to international exhibitions, demonstrating the stepping wheeled excavator of its own design – the technique, the manufacturers of which in the world are two – Menzi Muck and Kaiser. So in terms of development of production of special equipment, the Chinese national strategy of “small steps” seems completely justified.
4. “SOON CHINA WILL FILL RUSSIA AND THE WHOLE WORLD WITH CHEAP EQUIPMENT, AND ALL LOCAL MANUFACTURERS WILL GO BELLY UP”
Even though China is one of the world’s leading manufacturers of special machinery, this is unlikely to happen – for a variety of reasons.
First, the economy of China, like any other country in the world, is subject to both ups and downs. Local specificity lies in the fact that a huge impact on the production of technology have government financial flows. For example, when the government cut the allocation of funds for road construction a few years ago, the production of road construction equipment fell sharply, after all, about eighty percent of the total production of machines China produces for the domestic market, and only the remaining twenty or even slightly less – for export. So the “one buyer” scenario or monopsony is a tough environment creating obstacles for local producers.
In addition, when the demand for housing is far behind the supply, has also led to a reduction in production – this time for the construction equipment market.
Even taking into account the great ability of the Chinese to replicate successful ideas and constructive solutions, as a rule, they need some time to test new models in the domestic market and its “development” to the world level. During this time the market has time to some extent to be saturated with new products from other countries of origin, albeit at a higher price.
As for Russia, the question is what will happen more quickly: stereotypes associated with Chinese technology will be eliminated (and sooner or later it will inevitably happen) – or domestic producers will be able to produce a competitive product at an attractive price, while at the same time competing with Western counterparts in Its performance characteristics.
There are also the non-economic reasons for this. So, in connection with the new, declared by the White House, the economic policy to support the domestic manufacturer, it is unlikely to expect the growth of sales of Chinese equipment to the US in the near future.
Finally, the cheap price of Chinese equipment, as already mentioned, is in itself a myth. Somewhat cheaper – that’s the way it will be from the early 2010’s; Especially since in some countries, due to protectionist measures, the difference in value between Chinese and local equipment becomes even less.
Nevertheless, China’s ambitious plans for exporting products also should not be underestimated. So, according to forecasts of the authoritative English consulting company OHR (Off-Highway Research), in the early twenties the share of construction and other special machinery of Chinese production in the world market may well reach fifty percent. Thus, already in quite a close perspective, China is able to saturate its technology, if not the whole world, then the sex of the world exactly.
5. “IN RUSSIA, CHINESE COMPANIES AND THEIR DEALERS TODAY WORK IN COMPLETE CONFORMITY WITH WORLD STANDARDS”
Myth, the reverse of the first one discussed. But still it is a myth. Although the quality of Chinese products, including construction machinery and trucks, has grown very much over the past twenty to twenty-five years, not all of the samples on the market meet the world standards of quality. Despite the fact that many models of special machinery from China are getting to the leading positions in Russia, there is still something to be done for the manufacturers of this equipment and their representatives dealing with the service in our country.
For example, with the supply of spare parts. If in the European part of Russia and the territories adjacent to the PRC territories original components for Chinese cars can be purchased without special problems, in a number of other regions spare parts will have to be ordered and waiting. Although, it should be noted that manufacturers with this situation are seriously working, creating all new service centers, where there are warehouses with all spare parts – and the situation with the supply of “Chinese” components today is much better than it was seven or ten years ago.
The manufacturer’s warranty for the equipment is standard for one and a half to two years – but it can go up to three years, for example, for JAC loaders. For dump trucks and trucks in general, the warranty is 60-80 thousand kilometers, and the maintenance interval is 10-15 thousand kilometers. At the same time, as noted by experienced drivers, all liquids in the newly purchased truck – in the gearbox, engine and bridges – are best replaced immediately after purchase: the reason is the low quality of the oils produced in the PRC. Well, and the mileage mark of “0 km” is not particularly to be trusted: it is probable that the car, before you get to you, has done several thousand kilometers on its own.
Attention should also be paid to the wiring: traditionally the quality of the wires used in the PRC is lower than that of the equipment made in Europe or North America – therefore, it is better to replace the wiring in places especially exposed to external influences.
But this, we emphasize, only nuances, so to speak, local features of production, albeit important. In general, buying a special brand of a well-known brand manufactured in China, the Russian buyer can fully rely on its fair quality and good performance characteristics – and at a price lower than similar equipment from the world market. Actually, let’s say directly: this is what makes Chinese special equipment attractive in many countries of the world, including Russia.