The rapid development of China's construction machinery industry has finally ushered in an era of overcapacity that no one can deny. Overcapacity is a hard reality; the domestic market is only so big. To use a simple analogy, it is like 20 students who originally needed 20 pens but now have a supply of 80. During this period of saturation, unless capacity is absorbed in overseas markets and product quality is improved, no amount of clever persuasion can change this supply-exceeds-demand reality. At this point, some may argue, "Why not just increase the number of students?" But that is not how it works. A given supply-demand relationship is the biggest assumed coefficient; increasing the number of students is not something you can decide on your own. Even if the number of students were increased, the number of pen manufacturers would rise accordingly—this is the law and rule of economics. China has at most 1.4 billion people, right? You cannot suddenly increase that number in a short time, and it is even more impossible for all 1.4 billion people to become students buying pens. Therefore, the current downturn in China's construction machinery is only relative to the peak in 2010. Going further back, today's so-called downturn is not a downturn at all; it is still a period of strong demand and peak sales.

The above may seem off-topic, but it is not. The reporter from China Deep Foundation Engineering Network is neither an industry expert nor a company executive, and does not have much professional knowledge for industry analysis. However, by applying simple economic and market principles, one can still see some essential things amid the complicated industry phenomena. This is also why an industry media professional must have their own views and cannot simply dance to the tune of experts and industry analysts. Otherwise, echoing others and acting as a simple mouthpiece would leave no reason to exist.

At present, the construction machinery industry faces a broader environment in which the national economy is tightening in pursuit of quality. The only way forward is to work hard on enterprise transformation and upgrading and on improving product competitiveness, and also to actively go global and vigorously develop international markets to absorb excess capacity. But the latter must be built on the foundation of the former; otherwise, when facing international markets, companies will be defeated due to weak international competitiveness. In this regard, Sany Heavy Industry has done relatively well over the past two years. Here, the author may as well call it the "Sany Version" of the internationalization of China's construction machinery.

Recently, Cui Zhongyang, deputy general manager of Sany Group and general manager for Latin America, spoke about Sany Heavy Industry's experience in developing the Brazilian market. He said that since entering Brazil, Sany Heavy Industry's sales have continued to grow and its market share has steadily risen. In 2012, despite the unfavorable situation of Brazil's economy growing by only 0.9%, Sany Heavy Industry still achieved sales growth of 48%, reaching 1.05 billion yuan. Regarding Sany's path to success in Brazil, Cui Zhongyang introduced that high cost-effectiveness and good after-sales service are the most important factors for Sany products winning the local market. He emphasized that the most prominent advantage is the high cost-effectiveness of Sany products. At the same time, the strong domestic R&D team can upgrade and improve products and develop new products according to local customer needs. In addition, it also benefits from the group's consistently cautious and steady strategy for opening new markets. In 2007, Sany began sending personnel to Brazil to conduct in-depth research on the local market. Only after thoroughly assessing the capacity, layout, customer preferences, and local policies of Brazil's construction machinery market did it decide to invest. The construction of venues for the World Cup and the Olympics, as well as urban road traffic construction, brought huge business opportunities to Brazil's construction machinery industry, and Sany Heavy Industry seized this opportunity to open up the market. After these two major sporting events, the Brazilian government made improving infrastructure a priority for accelerating economic growth, which is truly a major advantage for Sany.

From Sany Heavy Industry Group's experience in developing the Brazilian market, we can see that the Sany internationalization version is: strong R&D strength as the foundation, in-depth market research as the prerequisite, excellent high-quality products as the root, meticulous after-sales service as the appeal, and seizing opportunities as equally crucial. In today's era of economic globalization, how can China's construction machinery industry get through the current difficult period? How can enterprises emerge from the trough? Undoubtedly, under the booming global infrastructure construction situation, going global is an inevitable choice. Strategically, if you cannot go global, it means you will ultimately be unable to defend even the domestic market. To develop global markets, the "Sany Version" of Sany Heavy Industry, whose internationalization path is increasingly well-established, is thought-provoking and serves as a reference model for every enterprise on the road to internationalization.

Editor in charge: Wu Yue