Chinese, Korean machinery make inroads into the UAE

Chinese and Korean heavy construction machinery are making inroads into the UAE and GCC replacing established European and US brands. Cost-conscious construction firms in the region are even replacing the used heavy machinery from the US and Europe with brand new construction machinery from China and Korea.

Leading industry sources said the price of new heavy construction machinery – access platforms, truck mounted boom pumps, heavy trucks or self-propelled aerial working platforms – match the price of used machinery from their European counterparts. The UAE has a strong used heavy machinery market worth several billion dollars and many construction companies buy imported heavy machinery from US and Europe.

Niinan M George, Marketing Manager, Alwasit Machinery, said: "There was a big apprehension about Chinese products, including heavy equipment. On an average there is a 40 to 50 per cent price difference between Chinese and European and American brands. Korean brands like Hyundai are cheaper than European and US brands but offer almost the same quality."

"Asian brands are definitely overtaking the US European brands and now the booming used-construction equipment market in the UAE is shrinking because the price of a new Chinese construction heavy machinery matches the price of a five or ten years old branded machinery imported from the US and Europe. Now the new Asian machinery is available at almost the same price of a used machinery from the West. The steep appreciation of Euro also helped Asian brands, but that advantage is now disappearing."

Said George Kim, Sales Manager of Junjincsm, a leading Korean manufacturer of heavy construction machinery: "We are a Korean company but our main markets are in the US, Europe and Australia. We have started exploring the Middle East market two years ago and our company is able to compete effectively against German companies because our price range of $300,000 to $1 million is considerably lesser than the German products. There are also Chinese companies, which sell cheaper than Korean machinery." He said the steep depreciation of Korean currency is helping Korean companies to sell heavy machines at a cheaper price while the Chinese companies are new entrants in the market.

"The price of European heavy machinery is almost twice the price of Chinese machinery. Korean brands are costlier than Chinese products, but still we are much cheaper than the European products. Cost factor is helping the Chinese construction machinery manufacturers because many consumers are now cost conscious," he said.

The Korean main markets such as US and Canada are in a shambles and the plan is to capitalise from the Middle East market. Korean companies are also making their machinery in China. Established only in 1991, Junjincsm has more than 50 per cent of Korean market for concrete pumps and made deep inroads in the US, European and Middle East markets.

Changelin Company, a Chinese heavy equipment maker, sells wheel loader, crane trucks, concrete mixers and road pavers and road rollers at a fraction of the price of European and US brands. Terence Wei, Sales Manager of Gulf countries said the company's product ranges matches the products profile of Caterpillar, the leading US company, but its price is almost half the US machinery price.