Hanson Liu, the general manager of XCMG’s import and export division, stood firm at Bauma China, dismissing the potential impact of President-elect Trump’s tariff comments on the company’s strategy. “Fortunately, it’s only a small portion of the market for us,” Liu noted, emphasizing that the U.S. isn’t XCMG’s biggest market. This perspective reflects a broader strategic pivot within the company, which is positioning itself to thrive in a global landscape increasingly defined by localization and technological advancement.
While the U.S. market remains significant, Liu has his eyes set on a diverse portfolio of international opportunities. XCMG aims to ramp up its exports to Europe and North America, projecting these regions will account for 25% to 30% of total exports by 2027. This ambition is underpinned by the establishment of a factory in Monterrey, Mexico, with plans for a second facility in the pipeline. Such moves underscore the company’s commitment to “internationalization as localization,” a philosophy that Liu champions by integrating local talent and resources into their operations across various countries.
High tariffs, according to Liu, do not serve the interests of consumers. He argues that they inflate prices, stifle technological competition, and ultimately lead to decreased customer satisfaction. This sentiment is particularly salient as XCMG navigates the complexities of international trade dynamics, especially in light of the uncertain tariff landscape under the new U.S. administration. Liu’s diplomatic approach to these challenges is indicative of a deeper understanding of market forces and consumer needs.
At Bauma China, the evolution of Chinese manufacturers was evident, with companies like XCMG stepping up their game in terms of technology. Liu articulated a clear trajectory for XCMG’s export strategy, which has shifted from a focus on price to service, and now, technology. The company is not just keeping pace with Western counterparts; it is setting benchmarks in electrification and hydrogen fuel technologies, demonstrating its commitment to innovation.
The company is also eyeing growth in regions like Indonesia and the Middle East. Liu mentioned plans for a manufacturing facility in Indonesia, focusing on electric mining trucks, while also exploring options in Saudi Arabia for excavator production. The rationale is clear: reducing logistics costs associated with heavy machinery makes localized production a more sensible choice.
XCMG’s investment in aerial work platforms (AWPs) marks another strategic pivot. Liu identified this sector as a key area of growth, driven by the increasing demand from equipment rental companies. The company’s commitment to electric technology in this space aligns with global shifts toward sustainability, which Liu sees as not just beneficial for the environment but also for the total cost of ownership for customers.
Moreover, XCMG’s collaboration with BYD for battery manufacturing places it at a competitive advantage in the burgeoning market for electric construction equipment. Liu highlighted the integrated supply chain that supports their electric offerings, asserting that this foundation allows them to move faster than competitors.
Despite the challenges faced by the Chinese construction equipment market, which has seen sales decline from their peak, Liu remains optimistic. He noted positive signs of recovery, with increased working hours for existing machinery and a spike in sales during October. This rebound, coupled with XCMG’s proactive export strategy, positions the company to not only weather the current storm but to emerge stronger in an evolving global market.
As XCMG continues to expand its footprint and innovate, it is clear that the company is not merely reacting to external pressures but is actively shaping its future in a rapidly changing landscape. The conversation around tariffs, localization, and technological competition will undoubtedly influence the trajectory of the construction equipment sector in the years to come.
