Construction equipment maker invests in and targets the fast-growing North American market, Du Juan reports
"It's not a question of whether Chinese construction companies will be successful in North America. It's really a question of how many," said Marc Dowdell, president of LiuGong Construction Machinery North America.
China LiuGong gains new ground in North America
As head of the subsidiary owned by Guangxi LiuGong Machinery Co Ltd, headquartered in Liuzhou, Guangxi Zhuang autonomous region in China, Dowdell helped it achieve a profit for the first time in 2013. The achievement is seen as a breakthrough for LiuGong in the North American market since it started operations there in 2008.
Established in 1958, LiuGong has become a leader in China's heavy construction-equipment and material-handling industries.
Its major overseas markets are Latin America and Southeast Asia.
The company owns a factory in India and a 16,000 square foot (about 1,500 square meters) parts warehouse and office near Houston, Texas, for better after-sales service.
"The United States attaches huge importance to service in the machinery market. Without an after-sale service, it's pointless discussing the products," said Zeng.
As LiuGong's helmsman who has worked for the company for about 30 years, Zeng Guang'an has long been an advocate for the company's expansion overseas.
Despite having a relatively small North American market share, he said the company is determined to develop it and will continue to invest there because it is the most important venue for machinery equipment manufacturers globally.
"Southeast Asia is currently our biggest overseas market but North America is the fastest-growing market for the company," he said. "We will maintain this high growth and profit increase."
From a long-term perspective, the North American market will account for 25 percent of LiuGong's total sales revenue in 10 years, according to Zeng.
"It is a must-to-do for Chinese companies to expand to overseas market when they have established their position in the domestic market," he said.
Increasing number of Chinese manufacturers invest foreign markets
According to the China Machinery Industry Federation, in the past few years, there is an increasing number of Chinese manufacturers started investing in foreign markets.
"Going global is not an easy thing to do. Chinese companies should fully prepare and do things step by step in foreign markets," he said. "Chinese companies used to give the impression of producing low-quality equipment with low prices in the international markets. However, this has changed. We have advanced technology and high-quality products, but it takes time to get others to learn about us."
In addition to LiuGong, Sany Heavy Industry Co, the world's sixth-largest manufacturer of construction equipment as ranked by International Construction magazine, and headquartered in Changsha, Hunan province, has been making efforts to expand its US market.
The company's American subsidiary headquarters in Peachtree City, Georgia, established 340,000 square feet of manufacturing space and 60,000 square feet of office space, providing products including crawler cranes, rough-terrain cranes, crawler excavators, container reach stackers and empty-container handlers.
With more Chinese companies entering the North American construction machinery markets, Douglas R. Oberhelman, chairman and chief executive officer of Caterpillar Inc, the world's largest maker of construction and mining equipment, said there will be one or two Chinese players that will stand out from the rest in the future.
For a long time, the North American market was dominated by high-end brands, which made it extremely difficult for Chinese companies to enter it.
"Talent localization is an important factor for success," said Zeng.
"We need high-level and professional law firms and headhunters working for the company locally in overseas markets. Meanwhile, the company has been making efforts to enhance understanding between Chinese staff and foreign employees, which we believe is also very important," he said.
ChinaDaily
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