Interview: How Sany plans to avoid price wars by doubling down on R&D

Sany retained its position as the sixth biggest manufacturer in the world in the latest Yellow Table, with an annual revenue of $10.8 billion.

That was a 6.6% year-on-year increase, as the company reported growth in regions across the world, including 44% in Africa, 15.5% in Asia and Australia, and 6.6% in the Americas.

But that’s no reason for complacency, as far as Mr. Yu Hong Fu, president of Sany Heavy Industry is concerned.

Instead, the company is preparing itself for a changing and competitive world and plans to put research and development (R&D) of new products and technology at the heart of its strategy.

Chinese OEMs have been accused of pricing aggressively in various markets around the world, including the US, European Union, and UK. In the UK, allegations from rival JCB that Chinese firms have been “dumping” cheap imports into the market have led to steep tariffs on machines ranging from 11 tonnes to 80 tonnes. And in the US, uncertainty around US President Donald Trump’s stance on tariffs continues.

Mr. Yu doesn’t feel that Sany has indulged in aggressive pricing (more on that below) and professes to want to avoid such tactics in the future.

Sany’s SY215E electric excavator (Image: Sany)

Instead, the company is betting on a long-term strategy rooted in research, development and localisation.

“We want to break free from the pricing war that’s being fought among the Chinese manufacturers,” he says, speaking through an interpreter. “So we are trying to achieve [this] through R&D - to use our technology as a barrier.”

Sany invested 6.92% of its annual revenue into research and development in 2024. Based on its revenue of US$10.8bn, that equates to over US$746m - a commitment that Mr. Yu says puts Sany ahead of most global competitors in percentage terms.

“We believe that we are, among all the OEMs for construction machines around the world, [investing] the most percent of our annual revenue into R&D,” he says. “And we are looking to even increase our investment further.”

Electrification and autonomy drive product development

Mr. Yu Hong Fu, president, Sany Heavy Industry (Image: KHL Group)

Sany is increasingly focused on new product lines such as battery-electric machines and smart, connected equipment. Mr. Yu highlights electrification and automation as core pillars of its R&D effort.

“I think this is one of the most anticipated points for growth,” he says. “We are trying to achieve the goal of bringing more value to our products with our advanced technology.”

Sany has already introduced semi-autonomous and remote-control functions across multiple product categories, including road machinery like rollers and pavers, mining machinery, and port equipment.

“For AI and semi-automation, we can provide the entire solution to our customers,” Mr. Yu says. “We put predictive maintenance into practice at an early stage, remote pilot and semi-unmanned pilot. We are at a stage where we’re looking to develop our products to be fully automated.”

China is already well advanced in the field of robotics, big data and autonomous driving, he notes, which puts domestic manufacturers like Sany at an advantage. “All we have to do is take these relatively mature technologies and apply them to construction machinery, so I think this will be a relatively fast process,” he adds.

Meanwhile, the country’s regulatory environment gives Sany an advantage in deploying automation technologies at scale, compared with more restrictive regions such as the EU, he asserts.

“Legislation is definitely one of the obstacles for the European Union,” he says. “Not just for Europe’s domestic market, but also when they roll out their products globally, they’ll encounter this kind of problem.”

Excavators remain core to growth

China remains the most important market for Sany and Mr. Yu expresses “great confidence” in the country’s economic future. “Our first priority would be servicing our customers in China,” he says.

But he is also optimistic about the prospects for growth outside of the Middle Kingdom, particularly in developing markets where infrastructure needs continue to rise.

Mr. Yu describes excavators as a “spearhead product line” for this growth, but he adds that the company expects “all the other machines for construction” to contribute to international expansion as well.

Markets in Asia, the Middle East, Africa and Latin America offer strong potential, with Mr. Yu noting the similarities in demand profiles, working conditions, and machine specifications to China’s domestic market.

“These developing countries are rapidly industrialising,” he says. “So they have a growing demand for construction machines - especially the countries around China.”

While Sany also sees opportunity in developed markets, including the US, Europe, Japan, Korea and Australia, it is taking a more cautious approach in these regions.

“We don’t want to disrupt the rules too much. And we would not choose pricing wars as a prime tool to go into these markets,” says Mr. Yu. “We want to bring value to the customers, and then they will choose based on their inclination instead of using lower price.”

That “value”, as he defines it, encompasses better aftersales support, spare parts availability and customer service.

A Sany telescopic boom crane (Image: Sany)

IPO to fund international expansion

To support its growth ambitions, Sany Heavy Industry’s parent company Sany Group recently announced plans for an initial public offering (IPO) in Hong Kong. It is seeking to raise up to $1.5 billion to support its global expansion efforts.

Given the regulations surrounding the IPO, Mr. Yu is limited in what he can divulge about the process and the intention behind it, outside of the regulatory filings already made. “What I can say is that right now everything’s developing as planned,” he says.

The proceeds will fund what Mr. Yu calls Sany’s “three main strategies”: globalisation, digitalisation and decarbonisation.

This includes further investment in battery-electric and digitalised intelligent products, new manufacturing facilities, and a global sales and service network to better support customers and dealers around the world.

“A lot of the funds [will go] into the R&D of electric products and digitalised smart products,” he says. “And also to support the construction of a sales and service network around the globe.”

Localisation is key to globalisation

As Sany expands internationally, Mr. Yu underlines the importance of localisation. “We have a model for our globalisation approach,” he says. “We’ll localise the operation as much as we can and service always comes first.”

That means relying on local talent rather than sending Chinese employees overseas and ensuring the company integrates with local communities.

“We want to create more jobs for the local community,” Mr. Yu explains. “And of course, local employees have a better understanding of the needs and the culture of the local customers.”

To support that strategy, Sany has built an online platform to manage service and parts requirements across its global markets. “This platform allows us to see all the parts, all the demands from a customer, anywhere in the world and how their needs are being fulfilled here in Changsha,” he says.

Developing the mining portfolio

Sany’s 120t hydraulic ming excavator, the SY1250H (Image: Sany)

Beyond construction, Sany is also investing in its mining equipment portfolio. While it already has a strong presence in underground coal mining, Mr. Yu admits that the company is “relatively behind” in the market for large-scale open-pit mining equipment.

“Mostly the size of the mining equipment [is where we lag],” he says. “But we are putting more R&D into larger mining excavators and mining trucks.”

With the global mining sector showing significant growth in various regions, this could represent a longer-term opportunity for the company as it diversifies its product base.

Balancing risks in developed markets

Sany’s view of developed markets remains pragmatic, particularly in light of ongoing trade tensions and tariffs. Mr. Yu acknowledges the challenges of operating in the US under the current tariff regime, although he says the impact on Sany so far has been limited.

“For Sany, the US is not a very big market [yet],” he says. “Right now, Sany US is still in the investment phase. We have not achieved the stage where we are looking to recoup a lot of revenue from that market. So in the short term, we don’t see too much of a negative influence.”

Nonetheless, he sees long-term potential and says the company is working within the current policy framework to maintain its operations there.

A Sany flag flies at Bauma 2025 in Munich, Germany (Image: Messe Muenchen)

“We are looking to navigate between the framework that the government from both nations has agreed to,” he says. “Currently we don’t have a very specific roadmap yet about exploring more in the US market because the tariff negotiations have not concluded.”

The same cautious approach applies to the UK, where anti-dumping tariffs have been imposed on some Chinese-made excavators, including those from Sany.

They involve tariffs ranging from 18.81% to 40.08% on imports of excavators of Chinese origin from 11 tonnes to 80 tonnes.

The measures are currently being reconsidered following submissions from another Chinese OEM, LiuGong, and Caterpillar’s Chinese subsidiary. In the meantime, all tariffs, including the 32.82% being levied on Sany machines, remain in place.

The UK government’s action comes after an investigation by the Trade Remedies Authority, prompted by allegations from UK manufacturer JCB that Chinese machines were being dumped in the UK at unfairly low prices.

Mr. Yu questions the basis for the action. “Our first reaction was that it was unexpected and we couldn’t understand it,” he says.

“The UK is definitely a good market for excavators and JCB is one of our competitors. But still, Chinese products only have a very small market share there. We did not enter into the UK market by pricing very low. So we don’t understand the allegations.”

And he suggests that ultimately, the benefit to JCB of the anti-dumping tariffs will prove to be limited.

“If JCB persuaded the UK government into taking this action, we think maybe in the short term it will work, but only in the short term and only for the UK market. Legislation like this cannot protect JCB in other markets around the world.”

A more modest future for China’s construction sector

A construction site in Changsha, China, where Sany is based (Image: KHL Group)

Domestically, Mr. Yu expects the Chinese construction market to continue playing a significant role in Sany’s growth, albeit at a slower pace than in the past.

“The structure of the Chinese economy is shifting right now,” he says. “I think this round of shifting and change, it has reached the bottom. And I believe it will start to go uphill from here.”

Rather than a return to the high-rise building boom of the previous two decades, Mr. Yu predicts a different construction landscape. “We’ll see more diverse kinds of construction buildings in China,” he says.

Growth will also be more modest after 10-20 years of rapid expansion in the market, he predicts.

In that context, Sany’s decision to prioritise long-term R&D, smart products and customer service may prove critical - not just to its international ambitions, but to its continued resilience at home.