LiuGong gains new ground in North America

According to data from the China Machinery Industry Federation, the annual profit growth of the country's machinery industry has fallen from 55.6 percent in 2010 to 15.6 percent in 2013.

Cai Weici, vice-chairman of the federation, estimates the profit growth of the industry will continue to decline to 12 percent this year.

"Going global is not an easy thing to do. Chinese companies should fully prepare and do things step by step in foreign markets," he said. "Chinese companies used to give the impression of producing low-quality equipment with low prices in the international markets. However, this has changed. We have advanced technology and high-quality products, but it takes time to get others to learn about us."

In addition to LiuGong, Sany Heavy Industry Co, the world's sixth-largest manufacturer of construction equipment as ranked by International Construction magazine, and headquartered in Changsha, Hunan province, has been making efforts to expand its US market.

The company's American subsidiary headquarters in Peachtree City, Georgia, established 340,000 square feet of manufacturing space and 60,000 square feet of office space, providing products including crawler cranes, rough-terrain cranes, crawler excavators, container reach stackers and empty-container handlers.

With more Chinese companies entering the North American construction machinery markets, Douglas R. Oberhelman, chairman and chief executive officer of Caterpillar Inc, the world's largest maker of construction and mining equipment, said there will be one or two Chinese players that will stand out from the rest in the future.

"We have been doing business for so many years in China, which means we know these Chinese companies well, and we know how to compete with them in the region (North America)," he told China Daily.

Luo said: "North America has a high threshold for construction equipment manufacturers in terms of technology, emission standards, safety and after-sales service. Therefore, the Chinese companies that want to test themselves in the market need to be well-prepared."

For a long time, the North American market was dominated by high-end brands, which made it extremely difficult for Chinese companies to enter it.

LiuGong conducted three years of research and development as well as test work before it established an office in the US. According to Luo, the company invested more than 30 percent of its R&D dollars into the North American and Europe markets.

"Talent localization is another important factor for success," said Zeng.

"We need high-level and professional law firms and headhunters working for the company locally in overseas markets. Meanwhile, the company has been making efforts to enhance understanding between Chinese staff and foreign employees, which we believe is also very important," he said.

LiuGong builds bigger global vision

Equipment makers look west