Chinese construction machinery makers are opening banks, designing tractors and abandoning core business deals in an effort to diversify and stay profitable as China's sputtering economy brings a sustained downturn to a once-booming market.
Encouraged to expand after Beijing fired up a $640 billion stimulus package seven years ago to help them beat the global financial crisis, manufacturers from Zoomlion Heavy Industry Science and Technology to Sany Heavy Industry are stuck with a glut of unsold equipment, factories they don't need and tumbling earnings.
With domestic demand, government investment and the housing market all weakening, growth in the world's second-biggest economy slid to a 24-year low of 7.4 percent last year. The head of the central bank's research bureau believes growth could slow again this year, and all but one of China's 30 provinces have cut their 2015 economic targets.
"It will be another tough year for construction machinery makers as the growth of the country's fixed asset investment continues to slow," said Shi Yang, a China-based senior consultant with industry intelligence firm Off-Highway Research.