In the 2015 Global Top 50 Construction Machinery Manufacturers Ranking, the participating companies are from 15 countries including the United States, Japan, China, Sweden, Germany, South Korea, Finland, the United Kingdom, Italy, France, Austria, Switzerland, Canada, South Africa, and India. By country, China's asset return rate is only 0.63%, which is only higher than India and South Korea.
What does this number mean? A simple comparison may be more direct. The recently announced one-year deposit benchmark interest rate for commercial banks in China is 2.5%. The extreme understanding is that a return on assets of 0.63% represents investing money in the construction machinery industry, and the annual return is not as good as depositing it in a bank.
This low number is partly due to the significant reduction in profits of Chinese construction machinery enterprises due to macroeconomic influences, and partly due to the excessive size of their assets. Data shows that on the 2015 Global Construction Machinery Manufacturers Ranking, the operating profit of 11 Chinese companies is only 8% of that of 6 American companies, but their total assets are more than half of the latter. If compared to Japanese companies, the results are even more astonishing. The profits of 11 Chinese companies are equivalent to 11% of those of 11 Japanese companies, but the total assets of Chinese companies are 1.2 times that of Japanese companies.
Undoubtedly, the asset scale of Chinese construction machinery manufacturers can even be called "asset burden" too heavy. This "burden" has its historical factors: the Chinese construction machinery industry as a whole is in a period of rapid growth, and it has been in a period of super rapid growth for a long time in the past. The expansion of manufacturing systems, marketing channels, and personnel is inevitable. But as the Chinese economy and construction machinery market return to rationality and fall back into the range of "medium to high speed" growth compared to the past, the development model based on high growth is gradually becoming ineffective. Faced with the reality of low growth, enterprises must create new development models and business systems, and it is imperative to reduce staff, shrink production capacity, and integrate and restructure.