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Zoomlion’s product return rate rises sharply

A 4.9% return rate at China’s second-largest construction equipment maker may not auger well for economy.


Zoomlion figures may have wider implications Image: Zoomlion

In a country that relies heavily on fixed investment in construction to fuel GDP growth, a sharp rise in the return of construction equipment may be a bad omen.

Returns at Zoomlion Heavy Industry Science and Technology Co peaked at 4.9% in the fourth quarter of 2012, compared to 0.25% in the first quarter. The full-year return rate was 1.79%, more than double 0.8% in 2011.

Q4 sales at China’s heavyweight construction firm were 9.42bn yuan, with returns of 461m yuan in the same period. The company had released the statement of figures in response to reports which questioned its sales figures, although did not identify the reports.

The pessimism is not shared across the industry, however. Doug Oberhelm, CEO of Caterpillar, still believes that China’s urbanisation will provide massive opportunities for construction equipment makers in the years to come.

Tags: car auctions, China, OEM and automotive, OEM Equipment

Published 28th July, 2013


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