New breakthrough! Liugong's overseas market momentum is strong

From January to November, the overall sales volume of Liugong in overseas markets exceeded 20,000 units, with a year-on-year growth of nearly 40%. The overseas sales revenue for the whole year has been on the rise and is expected to reach a new historical high for the whole year!

The high prosperity of the overseas market's construction end has facilitated the export of domestic construction machinery. Since the beginning of this year, the domestic market has been affected by a high base, macroeconomics and the epidemic, and the demand for downstream construction has been relatively sluggish. However, the overseas construction machinery market has been relatively prosperous.

According to the statistics and collation of customs data, from January to October 2022, the export value of China's construction machinery reached 36.521 billion US dollars, increasing by 34.2% year-on-year. The export value maintained a relatively high growth rate, indicating that the export value of construction machinery products for the whole year has ensured a significant growth trend. Against the backdrop of multiple uncertainties such as the unclear global trend of epidemic prevention and control, the persistence of geopolitical conflicts, and unstable policies in some regions and countries, Liugong has also encountered challenges in logistics and customs clearance, as well as market risks in its export operations and development. Facing the difficulties of scarce resources at southern terminals for roll-on/roll-off and general cargo ships and the high difficulty of nearby transportation, Liugong has adopted a strategic cooperation approach with downstream industries (logistics) to solve the problem.

On April 25th, a China-Vietnam international freight train carrying 35 pieces of Liugong equipment departed from Liuzhou Station and headed straight for Dong Dang Station in Vietnam. This was the first Liugong China-Vietnam freight train under the RCEP. In July of the same year, Liugong signed a strategic cooperation agreement with COSCO Shipping Special Transport Co., LTD. (COSCO Shipping Special Transport), and for the first time, it dispatched over a hundred pieces of equipment from Qinzhou Bonded Port Area, Guangxi to Indonesia and Australia.

Through in-depth cooperation, cross-border freight trains and cross-border ocean transportation have provided Liugong with dedicated express lines for overseas logistics transportation, enhancing international transportation efficiency and reducing logistics costs. At the same time, in the face of the risk of stagflation due to the downward revision of global economic growth expectations, Liugong, relying on its marketing and strategic layout overseas over the years, has designated the "Belt and Road Initiative" as its top priority project and incorporated the development of the "Belt and Road Initiative" into its "14th Five-Year Plan" for strategic development. The leaders have set a good example and coordinated Liugong's resources to participate in the "Belt and Road Initiative" projects. Plan, layout and implement, and clearly state in the development priorities of Liugong during the 14th Five-Year Plan period, to strive to build a development and cooperation highland facing ASEAN and better serving the "Belt and Road Initiative", and accelerate the formation of a new development pattern with domestic circulation as the mainstay and domestic and international circulations reinforcing each other.

It is mainly reflected in zero tariffs and trade facilitation within the region. Nowadays, there is no longer a need to apply for a certificate of origin at the customs. One only needs to issue a declaration of origin by oneself. This not only saves time but also makes trade arrangements more convenient and further improves the efficiency of customs clearance.

In terms of component imports, after the implementation of RCEP, the cost of components imported from Japan and South Korea has decreased, and the average import tariff has directly dropped from 5.4% to 4.8%. At the same time, in accordance with the rules of origin accumulation, the complete sets of construction machinery products equipped with these components can be exported to RCEP regional countries and also enjoy tariff preferences. The RCEP also offers more open market access, creating the same competitive conditions for Chinese enterprises to provide products, services and financial services to consumers or enterprises in other RCEP member countries as local enterprises. Moreover, investment barriers have been further broken down, and investment from outside the region has shifted further towards investment within the region. The market and space have grown significantly, and the attractiveness and level of openness of investment have been further enhanced.

As of November, Liugong has sold over 4,000 complete machines in the RCEP region this year, representing a year-on-year growth of nearly 50%. Sales revenue increased by nearly 70% year-on-year. Riding on the momentum of the RCEP, in the future, Liugong will focus on high-quality and sustainable development, deepen the strategic guideline of building the entire value chain of "R&D - manufacturing - supply chain - marketing - service" in strategic core countries, and continuously increase overseas investment in key core countries in various regions, especially those along the RCEP and the "Belt and Road". Expand the business of new energy, intelligent and other new technology products and services in key countries of the RCEP region, and accelerate the formation of a new development pattern.