When it comes to renowned companies in the field of construction machinery, Komatsu Limited from Japan definitely deserves a mention. Since entering the Chinese market in the late 1950s, Komatsu has been deeply involved in China for over 60 years. Twenty years ago, Komatsu's mechanical equipment, such as excavators, bulldozers, loaders, and dump trucks, could be seen everywhere on domestic construction sites.

In the late 1990s, with the rise of China's construction machinery manufacturing industry, the situation where Komatsu dominated the market gradually came to an end. Currently, the company with the highest revenue scale in China's construction machinery industry is XCMG Group. As a rising star, who has higher revenue, XCMG or Komatsu?

Advertisement

The History of Komatsu's Founding

In January 1917, the Komatsu Ironworks, a subsidiary of Takeuchi Mining Company, was established, which is the predecessor of Komatsu Limited. In the 1930s, Komatsu successfully developed and mass-produced Japan's first crawler-type G25 tractor by imitating similar American products, thus establishing its position in the Japanese agricultural machinery market.

After that, Komatsu successively developed products such as bulldozers, graders, forklifts, and shovel loaders, enriching its product line. Since the 1960s, Komatsu has been firmly in the leading position in the Japanese construction machinery market. At the same time, Komatsu began to expand its overseas business into Southeast Asia, the Soviet Union, the Middle East, and the Chinese market.

Starting from 1963, Komatsu carried out direct trade with China National Machinery Import & Export Corporation, and the trade volume grew rapidly. The largest transaction was a historic record of 7.2 billion yen in November 1964. For a single Japanese company, this was the largest contract order between a Japanese company and China at that time.

By the mid-to-late 1980s, Komatsu's cooperation with Chinese companies expanded into the mining machinery field. Entering the 1990s, domestic infrastructure accelerated, and there was a large demand for various types of mechanical equipment. Komatsu successively established three joint ventures in Jining, Shandong, and Changzhou, Jiangsu, namely Komatsu Shantui Construction Machinery, Komatsu (Changzhou) Construction Machinery, and Komatsu (Changzhou) Casting Co., Ltd. Currently, Komatsu has developed more than 20 wholly-owned and joint venture enterprises in China.Having developed over the years, Komatsu has a century-long history, with its product line primarily focused on cranes, bulldozers, and excavators, all of which have reached an advanced level globally. Komatsu is also a step ahead in terms of automation. In terms of quality, their products are robust and durable, with extremely high operational efficiency. Komatsu is also capable of producing military equipment, such as the Type 87 reconnaissance and warning vehicle and the Type 96 armored personnel carrier for the Japan Ground Self-Defense Force.

Relying on decades of technological accumulation, Komatsu's products are highly competitive in the international market, making it the world's second-largest construction machinery manufacturer. According to the published financial reports, Komatsu's total revenue for the year 2023 was 3.86 trillion yen, approximately 27 billion US dollars, a 9% increase from 2022; the net profit reached 393.4 billion yen, about 2.75 billion US dollars, with an increase of over 20%. It is evident that the financial report performance is quite impressive.

XCMG: Securing the Top Position in the Domestic Market

As the founder of China's construction machinery industry, the predecessor of XCMG can be traced back to the Huaxing Iron Factory established in 1943. At the end of the 1980s, the merger of Xuzhou's "three factories and one institute" led to the birth of XCMG, becoming the first group company in China's construction machinery industry.

After 2000, XCMG entered a fast track of development, successively launching all-terrain cranes of 130-ton, 300-ton, and 500-ton classes, establishing a crane matrix and laying the foundation for the company's leapfrog development. By 2009, XCMG's cranes had captured nearly 60% of the domestic market share in China.

In March of this year, XCMG developed a 4,000-ton class wheeled crane, breaking the world record again, marking the 7th time XCMG has successfully broken the record for the world's largest wheeled crane.

In terms of excavators, XCMG has laid out a range of excavator products. In 2018, they launched the 700-ton class hydraulic excavator, known as "China's First Dig," making it one of the four countries in the world with the capability to develop and manufacture hydraulic excavators over 700 tons.Today, XCMG Group has entered the first echelon of global construction machinery enterprises, with a revenue scale ranking fourth in the world. Its products cover construction machinery, mining machinery, agricultural machinery, sanitation machinery, emergency rescue equipment, and commercial vehicles, which are sold to more than 190 countries and regions.

 

In the past year of 2023, XCMG Group achieved a total operating income of 92.85 billion yuan, with a net profit of 5.33 billion yuan, a year-on-year increase of 23.51%; both revenue and profit continued to maintain the domestic industry's "double first". In terms of revenue scale and profit, the gap with Komatsu is further narrowing.