Xingma Group Chairman Liu Hanru analyzed the current market conditions during the Xingma Production Planning Conference, expressing confidence in a potential market recovery next year. He urged sales and service teams to actively expand the market share of traditional products such as bulk cement trucks and concrete mixer trucks. Additionally, he emphasized the need to accelerate the promotion of well-established, market-tested products that hold industry advantages—specifically the Xingma pump truck and truck crane. Liu highlighted that the company’s future product development will focus on construction machinery related to heavy trucks. By leveraging Hualing Heavy Trucks’ chassis expertise and Xingma’s long-standing top-loading production advantages, the company aims to capture a stronger position in the construction machinery sector. This strategy is designed to broaden the product chain, spread risk, and enhance overall competitiveness.
This situation reminds the writer of recent news about Xugong’s rumored move into the heavy truck industry. Reports suggest that these rumors are now becoming a reality. On July 10, Xugong Technology announced that it had signed an "Intent for Equity Transfer" agreement with Jiangsu Chunlan Auto Co., Ltd., a shareholder of Nanjing Chunlan Automobile Manufacturing Co. The deal involves purchasing 60% of Chunlan Auto’s shares from Jiangsu Chunlan at a price of 270 million yuan.
XCMG believes that integrating heavy-duty vehicles with construction machinery can help diversify its product portfolio, which would support the sales of its construction equipment. Moreover, entering the heavy truck sector could improve the overall performance of its engineering machinery products. After acquiring Chunlan Auto, XCMG plans to use this platform to expand its product line and enter the heavy truck market at a lower cost, capitalizing on the current favorable market conditions and creating new sources of profit.
This move reflects a growing trend of industrial convergence between the heavy truck and construction machinery sectors. Industry experts believe that this acquisition will allow XCMG to better leverage its existing strengths in construction machinery, including product design, accessories, and marketing channels. It could also help form industrial clusters, driving the production of other related engineering machinery products and establishing a core base for large-scale parts manufacturing, thereby enhancing competitive advantage.
Internationally renowned companies like Volvo have long integrated heavy trucks with construction machinery, excelling in areas such as vehicle compatibility, handling, comfort, and safety. Their zero-component technology is ahead of many construction machinery products. Therefore, entering the automotive industry can significantly elevate the overall quality of XCMG’s engineering machinery.
According to media reports, a major goal of XCMG’s acquisition of Chunlan Trucks is to align with the Volvo Group and achieve interactive growth in both truck and construction machinery businesses. While this goal may be challenging, China has seen successful examples from Anhui Xingma and Hualing Heavy Trucks. For instance, in 2003, Xingma established a subsidiary of Hualing Heavy Truck, introducing Japanese Mitsubishi technology to produce heavy truck chassis and vehicles. Initially, Hualing mainly supplied special chassis for Xingma, but over time, Hualing-branded trucks gained market recognition and eventually carved out their own niche in the heavy truck industry.
XCMG’s subsidiary, Xu Jian, has significant production capacity for construction machinery and special vehicles. Although the peak growth period for heavy trucks has passed, a well-executed strategy could still make this a viable choice. The manufacturing and parts technology in the heavy truck sector is generally more advanced than in construction machinery, and this consensus could allow Xingma and Hualing to maximize their equipment and technological advantages. It could also lead to substantial economic benefits in terms of production scheduling, material utilization, and waste reduction.
With Xingma’s long-term market influence and customer base, expanding into the construction machinery sector through brand extension seems like a smart move. The winners, in this case, are likely to be those who can effectively leverage these synergies.
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