Industry consolidation: Why Are Everyone "huddling together"?

If you pay attention to the #excavator parts industry, you will notice a clear trend - everyone is buying, buying, buying, or joining hands to cooperate! Whether it is international giants or domestic enterprises, they are all expanding rapidly through mergers and acquisitions, joint ventures, strategic alliances and other means.

Reduce costs and enhance competitiveness

The excavator parts industry is a capital-intensive and high-cost one, especially for core products like #hydraulic systems, tracks, and engine components, which require huge investment in research and development as well as production. If an enterprise is too small in scale, it will suffer losses in terms of purchasing raw materials and manufacturing. As a result, many companies choose to directly acquire competitors or supply chain partners to spread out costs. For instance, HS Hydraulic Equipment Co., Ltd. has, in recent years, through mergers and acquisitions of several small and medium-sized hydraulic component manufacturers, not only expanded its production capacity but also optimized the supply chain, making the product prices more competitive.

Technological upgrades keep up with industry trends

Nowadays, the excavator industry is also transforming towards intelligence and electrification. If traditional parts enterprises fail to keep up with the pace, they are very likely to be eliminated. But developing new technologies not only burns money, but also requires time. What should I do? Just buy the technology directly or cooperate with a technology company!

Global layout, seizing emerging markets

The demand for infrastructure in regions such as China, Southeast Asia, Africa and South America is strong, and the sales of excavators continue to grow. However, the customer demands and regulatory standards in each market are different. If one gradually expands on their own, the efficiency will be too low. As a result, many enterprises choose to directly acquire local brands or form joint ventures with local distributors to quickly enter the market.