Archive for April 2011

Direct Fuel Injection Engines   Leave a comment

It is interesting to note that in China, customers don’t like fuel injected engines. You find these more often than not in International Brand machines, such as Cat, Hitachi, Komatsu.

Direct Fuel Injection is supposed to increase output of the engine while also reducing fuel use. These engines are designed to take modern low sulfur engines as they run best on these types of fuels which are now mandated in western countries. In previous years, the sulfur content of diesel sold in western countries was 500 parts per million. In recent years, in order to reduce pollutant footprint, governments in the west have mandated that diesel must be reduced to 15 parts per million. In doing so, engines needed to become more sophisticated to pun on these low sulfur content fuels. Likewise, putting high sulfur content desiel in these engines deisgned for 15 parts per million sulfur is bad for the engine.

The problem in China is that the only diesel sold contains 1000 parts per million. Putting this fuel into engines designed for low sulfur content is cuasing the engines to run poorly. The power output suffers, as well as the fuel economy.

This is why in China, people avoid fuel injection engines.

In years past

Posted April 4, 2011 by chinacetrader in Uncategorized

Xushui, Hebei Province   Leave a comment

Just visited the village of Xushui which is in Hebei Province, about 100km South West of Beijing. Since the mid-80’s Xushui has become of used equipment trading hub for North China and for all of China. This was simply a farming village but now has over 240 “yards”. The yards are relatively small and each yard has anywhere from 5 to 20 machines in the yard on offer. Usually in the back of the yard is the repair area. The repair area is just an open air place where the tools are located the customer repairs the machine. There is no workshop.

All the owners of these yards are from the village and they don’t let anyone else set up yards. There are now two streets. The original old street, and in the last few years, they have expanded to make a second street about 300m down the road from the original street.

99% of the machines sold in this village are domestic built machines from either domestic OEMs or foreign invested OEMs. Each broker tends to “specialize” in a product line. Either they do Excavators, Wheel Loaders, Road building equipment (rollers and Motor Graders). There were a few who sold compressors/forklifts/generators. So a guy who does road building will only have compaction and motor graders in his yard. A guy who does wheel loaders will only have wheel loaders in his yard.

There were no cranes to speak of, nor paving equipment, nor bull dozers.

Word in the market is that times are tough. The period from the end of Chinese New Year (Jan/Feb) to June is considered the peak season for equipment trading. Some 60% of all purchases (new and used) are made during this period.

Reports from the UE markets in Shenzhen, Shanghai and Xushui are all indicating that purchases are down 50% compared to years past. This is believed due to the governments attempt to reign in inflation and slow down the economy. The government stated that its GDP target this year is 7% (low by traditional standards) and the banks have been strictly tightening credit, contributing to the slowing demand in equipment and a slow down of the economy overall.

Customers come from all over China to buy used equipment from these yards. As usual, these brokers suffer from serious credibility problems and many people complain about being “cheated” from this market. It is defiantly a buyer beware market.

Posted April 4, 2011 by chinacetrader in Uncategorized