In March 2018, we visited 9 provinces in China's eastern, central and western regions for investigation. From the survey, sales in the peak season (May-May) may exceed expectations. We expect the sales growth of excavators in March to be 30%~50%, cautiously optimistic about the whole year's demand for the excavator industry, and it is expected that the annual growth rate in 2018 will be 10%~20%. On the other hand, we believe that in 2018, or in the year of profitability of the construction machinery industry, the industry may reshuffle, and the sales growth of domestic excellent manufacturers is expected to outperform the industry.
We expect the sales growth of the excavator industry in March to be between 30% and 50% year-on-year, far faster than the 14% increase in January and February. We believe that the reasons for the strong sales in March: 1) The time for downstream resumption of work this year is generally early, and the machine utilization rate remains high, which is better than the same period of last year. The downstream demand mainly comes from new rural construction, railway and highway investment; 2) Update demand Increase, the proportion of TM to replacement is generally between 40-50%, and some regions are above 70%, mainly for 2010-2012 machines; 3) Manufacturers focus on increasing market share this year, and dealers hope to increase in 3-5 months. Take more orders during the sales season to ensure sales for the whole year.