Why does Zhejiang Dingli not go overseas to build factories?

Based on a series of acquisitions and long-term plans, the company has positioned itself at the high-end, bypassing low-price competition and global production, focusing on innovation, and has always maintained a single production base in the Chinese market.

Dingli acquired MAGNI of Italy in 2016, CMEC of the United States in 2017, TEUPEN of Germany in 2020, and established distribution partnerships with Magni and MEC in the European and American markets. Recently, Dingli announced that it intends to 100% control MEC, while divesting 20% of  Magni equity, to achieve independence in the European market.

Xu told reporters that the acquisition plan and focus on research and development are rooted in Dingli's initial international strategy, including growth in mature Asian markets such as South Korea, Singapore and Japan, where there is demand for high-quality products.

Global business strategy

At a very early stage, Dingli decided to sell its products to countries in Asia, Europe and the Americas, so it had a series of acquisition plans.

It has adopted an ambitious product strategy that, in principle, offers devices at similar prices in both mature and emerging markets. The modular design ensures that 90% of the components in each product range are universal (helping customers reduce maintenance and parts storage costs) and offers three power options: pure electric, hybrid and diesel. BT44ERT is the world's only high meter arm modular design electric diesel hybrid platform product.

With the continuous advancement of the first phase of the project, the construction of Dingli factory is also accelerating the expansion. At present, the fifth phase of the factory with a total construction area of 250,000 square meters has been completed, and it is expected to carry out climbing production in 2024, mainly producing intelligent high electric arm type (36-50 meters)/shear fork type (33-36 meters) and differentiated aerial work platform. It is reported that an arm aerial work platform can be offline in 30 minutes. 7 minutes down a scissor-type aerial work platform. In addition, all Dingli arm products are suitable for container transportation, which is conducive to reducing transportation costs.

With the support of the above advantages, Dingli believes that there is no need to go overseas to build new factories. Some aerial work platform manufacturers have chosen to set up factories in Mexico, which is actually aimed at the North American market.

Not just for developed markets, but also for emerging markets

Dingli's global strategy also takes into account the needs of emerging markets.

Its global operations "do not only consider developed markets, but gather information from different parts of the world and develop global strategies." With the support of international research and development centers in Italy, Germany and the United States, the company offers the same model for both emerging and high-end markets, but the warranty and value-added services may vary, for example, the warranty may be three years in developed markets, but only one year in emerging markets.

When talking about whether there are new acquisition plans, Xu Shugen made it clear that there will be no more expansion of research and development centers, the existing three research and development centers are enough to develop the products needed by the market, and the performance has proved this. Data show that from January to September 2023, Dingli's revenue increased by 13.77% year-on-year, and net profit increased by 44.58% year-on-year, ranking among the world's three major aerial work platform manufacturers.

Electric and oil-free equipment

A variety of power options are also an important part of Dingli's product strategy. In addition to the RT series cross-country shear fork aerial work platform and pure electric, hybrid, diesel arm aerial work platform, we also focused on the development of a new oil-free pure electric environmental protection shear fork aerial work platform, the series of products do not need hydraulic system, take-off and landing, steering are using electric push rod to replace the traditional oil cylinder, no oil, no noise, zero emissions, higher environmental protection.

This is a very advanced technology, and it is understood that the working height of oil-free all-electric products can reach 16m.

Made in Mexico and Made in China

We estimate that manufacturing in Mexico or anywhere else overseas will increase production costs by 20 percent compared to domestic plants." There is no need for another manufacturing base because the supply chain and manufacturing efficiencies in China cannot be replicated in Mexico."

"We have such a huge product line, with more than 250 specifications, that if we set up a factory in Mexico, it would be difficult to choose which products to produce there," Mr Xu said.

In the previous US Department of Commerce on the domestic aerial work platform double counter-investigation, the results of the victory proved its own strength and obtained a much lower proportion of tariffs than other manufacturing. With the best quality and the best products to win the victory.

Chinese market

Public data show that the rental price of China's aerial work platform has dropped by about 30% a few years ago. The biggest difference between mature and emerging markets is that leasing in the former is more stable.

"In new markets, some leasing companies, especially the smaller ones, have not fully figured out the concept of leasing and tend to think that you can lease a piece of equipment for 10 years."

"Low-price competition is especially common in growth markets such as China, and while it is welcome in the short term, it is certainly unsustainable in the long run and will not ultimately benefit all parties in the industrial chain." And low prices can never guarantee the quality of a device or the salvage value of a second phone. It's a suicidal selling concept."

Xu Shugen believes that the number of aerial work platforms in China will continue to grow rapidly, and the scale will reach 1-1.1 million units in the next three years. After that, I believe the market will level off.

Focusing on the future, Dingli will continue to focus on the field of aerial work platforms and produce products that meet customer needs.