Core Tip: Ten years ago, a large-scale loader price war completely changed the way forward for the Chinese construction machinery industry; ten years later, the current main product excavator seems to be able to escape the historical re-emergence of chaos.
Due to the strong presence of foreign brands, the argument for the excavator industry's discourse power has increased. But with or without the fight, the industry is advancing toward the point of consolidation and upgrading.
Will the excavator industry repeat the same mistakes, follow the footsteps of the loader, and play a huge, tragic and tragic, and far-reaching price war at the beginning of this century? This may be the proposition that the Chinese construction machinery industry, which has undergone rapid growth for more than a decade, is most unwilling to mention but has to face it.
The haze of oversupply after overhang has been overhanging the top of the head. The sales sentiment after the macro-control has rapidly dropped from the top to the bottom, and the sales promotion methods under the sluggish market seem to indicate that the Chinese construction machinery industry will once again fall into the trap. Ten years ago history.
On that occasion, the main product loader chose the most direct and bloody way to end the chaos battle of price wars, and this time?
Excavator "Great Leap Forward"
Around 2005, local Chinese companies represented by Sany, Liugong, and Xiagong began to exert themselves as excavators, the most representative products in the field of construction machinery. Prior to this, this market was divided up by foreign-funded enterprises, which accounted for more than 90% of the market share for a long time.
At the same time, a large group of engineering machinery, such as XCMG, Zoomlion, and Longgong, followed the production of excavators, and quickly formed scale. Even Wuliangye, heavy truck giants China National Heavy Duty Truck, and shipbuilding private enterprises Rongsheng Heavy Industry also rushed to join the excavator industry.
Overnight, almost all construction machinery companies have launched an excavator production line with a production capacity of as little as one thousand units and as many as 100,000 units. The capital of each road fell from the sky, and the central enterprises privately set up their troops here.
Behind this, is the huge "rigid" demand for construction machinery products brought about by policy investment in China's real estate sales, high-speed railway leap forward, and urban-rural infrastructure construction in recent years. A group of ordinary farmers who put down Shantou to participate in the construction of the project and turned it into a user of construction machinery has become the most powerful and fundamental endogenous power source in the excavator and even the entire construction machinery market.
Correspondingly, construction machinery manufacturers introduced credit sales models (instalments, financing leases, etc.) in due course, which greatly stimulated the desire of users to purchase. At the same time, such equipment as excavators, which are frequently worth millions of yuan, and which previously only large industrial and mining enterprises have the ability to purchase, have gradually become common households as a type of industrial consumer goods due to the diversification of payment methods. A large number of new users have thus emerged.
Since 2009, sales of excavator products have increased dramatically and reached a high point in 2010. This year, China sold a total of 165,000 sets of excavators, setting a new global record. Just a few years ago, the annual sales volume of excavators in our country remained stable below 30,000 units.
In March 2010, the monthly sales of excavators nationwide exceeded 30,000 units. This is not only the first time in the history of excavators in China, but also unique in the world, and China has become the world's largest excavator market and output country. .
In 2011, although the excavator market went through the curve of highs and lows with the macro environment, the above records were rewritten in March. The 24 major excavator manufacturers of the month’s statistics totaled 43,000 excavators. The year is expected to increase by 10% year-on-year, thus approaching the scale of 180,000 units.
This "brilliance" once again exacerbated the enthusiastic enthusiasm of manufacturers to pounce on excavators. Until now, there are still unfamiliar new faces in the excavator industry. They are quite ambitious; and the manufacturers that have been among them have shaken up the banner of expansion. The plan is huge.
Under such "barbarous growth" in the debate over overcapacity, an unavoidable problem has emerged - overcapacity.
According to incomplete statistics from the China Construction Machinery Industry Association, as of the end of 2011, the actual and planned production capacity of excavators in China has reached 720,000 units.
Yes, 720,000 units! This is 4.36 times sales in 2010. If nothing unexpected happens, this will also be exactly 4 times the amount of excavator sales in China in 2011 (total sales of 169,078 units from January to November).
In this regard, there are differences in the industry's attitude.
The optimists pointed out that most of the 720,000 units are planned production capacity, and they have a lot of water, which is not practical. Moreover, companies are not fools. Planning to “exaggerate†may be a gimmick. In the face of actual market changes, all plans will be adjusted at any time. Moreover, such "overcapacity" may be an "ecstasy" thrown by individual companies in order to confuse their competitors in order to confuse audiovisual use.
Second, how large is the Chinese excavator market? The peak of capacity and geometry? Xia Gong President Cai Kuiquan once made an estimate: Taking Korea as a reference, the peak of infrastructure construction in history has pushed the construction machinery market to the top, when the country's excavator annual sales reached 15,000 units. The land area of ​​China is nearly 50 times that of South Korea. Regardless of the large number of empty areas in the northwest, Japan’s 15,000 units will be multiplied by 50 to hit 40%, which is 450,000 units, which is the peak of China’s excavator market capacity. About 450,000 units will be around.
This kind of pre-judgment logic is not strict, but the current annual sales volume of nearly 200,000 units is probably not the historical peak of the Chinese excavator market.
There are also many pessimists who focus on the personal experience and judgment of the current excavator market. According to an independent survey conducted by the enterprise market planning department, the actual production capacity of domestic excavators as of the first quarter of 2011 has exceeded 300,000 units. In other words, under the premise of not expanding production capacity in each company in 2011, the sales volume will double and it will be possible to digest these excess capacity.
What makes it even more worrying is that the expansion plans previously formulated by many companies will basically reach their capacity in the next year or two. According to its estimation, by the end of 2012 to the middle of 2013, the sum of actual excavator production capacity in China will reach The scale of 450,000 units, and the market capacity at that time may still be about 250,000 units. This means that nearly half of the production capacity will be in excess.
In fact, both views are self-evident, but overcapacity is an accepted conclusion in the industry. It is difficult to accurately measure the actual production capacity, and the real demand for the market is inestimable. This excess capacity cannot be grasped. This also led directly to the company's judgment on the direction of the industry.
However, if we stand at a higher level and examine it with a historical and open perspective, “moderate overcapacity†will lead to increased competition, which will lead to an increase in industry technology, service levels, and lower production, management, and operating costs. With the survival of the fittest, the industry as a whole will eventually develop and progress. In fact, this route has been confirmed in many industries.
Of course, in this development process of “volume inflows—intensive competition—industry reshuffle (bankruptcy or success)—stabilityâ€, the market will naturally choose companies that are worth living, and eliminate companies that are not competitive. Obviously, the current excavator industry is standing at the crossroads from "competition" to "shuffle."
"Infighting" has been a decade ago, the Chinese loader industry has been staged due to overcapacity leads to steep decline in profits, desperation only with the price of a desperate battle of a tragic scene --- price war. The current excavator industry seems to be moving in a dangerous direction along this similar path.
At present, excavator manufacturers have not used direct price cuts to start killing, but they have been fiercely fighting for various kinds of promotional activities.
Due to the sudden outbreak of the excavator market in 2009, the surge in the sales of major excavator brands has surged after 2010, especially in late 2010 and early 2011.
Sending accessories, gift cars, cash back, house awards and other promotional methods are endless.
In some commercial activities for the purpose of sales promotion, the raffle link has become the focus, and the curiosity continues. According to some media reports, customers who have paid the deposit can all get the chance to participate in the lucky draw at the fair, with prizes ranging from a few thousand dollars to as much as a million dollars. What's more, a sweepstakes means winning and will never let you go empty handed.
Taking a local brand Jiangsu agent as an example, all customers who have paid a deposit can participate in the lucky draw. The third prize is 3,000 yuan, the second prize is more than 30,000 yuan, and the first prize is 80,000 yuan and two special prizes. The prizes are for each SUV car; for a Japanese brand Beijing agent promotion sweepstakes, customers who purchase excavators can participate in the prize for the mini excavator; another Japanese brand is directly involved in the lucky draw of Henan agents. Give users rewards for commodity housing; in an agent sales promotion conference in Anhui, the special prize is as high as 1 million yuan.
Such a "draft drawing" is already equivalent to a discount promotion, which is exactly a substantial price reduction. The competition between excavator brands has gradually been separated and ignored the product itself, deducted as a promotional tool and agent strength Competition.
Another competitive model is to reduce business conditions, in exchange for customer orders for the price, excavator industry in the past one or two years has become commonplace. Among them, the down payment is the most common, and even some regions and some agencies have already made zero down payment sales.
It is rather surprising that this approach is not only domestically owned brands. According to industry sources, some agents of international brands such as Komatsu and Volvo have also adopted a zero down payment or low down payment strategy to compete. These unconventional methods that have been used by some of the newcomers to achieve rapid business expansion seem to be fully spreading and gradually lead the excavator industry into a distorted and radical terrorist trap. At the end of this road, it may be a fierce price war with the loader industry.
Coming soon, the large-scale price war has not yet broken out. However, the dark sales campaign from the end of 2010 to the beginning of 2011 has caused excavator companies to be jealous.
According to statistics, in March 2011, China's excavator market hit another record, but from the second quarter, the market sales plummeted. As of November 2011, the decline momentum has not yet been attenuated. The month's excavator sales decreased by 37.90% year-on-year. Set a new low during the year. This was interpreted by numerous industry insiders as the overdraft that led to the market demand for sales promotion, that is to say, when the grain was sold.
Table 1 shows the sales growth rate of the Chinese excavator market from 1999 to 2010. It can be seen from this that the excavator industry's rapid development momentum in the past ten years, although it has experienced ups and downs.
The judgment based on the macro environment and the trend of the industry in 2012 has exacerbated many people's worries about the forthcoming large-scale price war in the excavator industry.
In their view, the current profit rate of excavator products is still high, and there is room for price reduction. Second, the huge pressure of overcapacity, the unstable macroeconomic situation, and the homogeneity of China's excavator products are serious, and the self-control of core components has not yet been resolved. The chance of companies winning the market by relying on technology and quality is minimal. If market conditions change, a price war may be inevitable. The current sales campaign is actually a precursor to a large-scale price war. This "potential energy" is gradually accumulating. It is pessimistically expected that within two years, the price war may erupt.
However, this view is not the current mainstream. In a multi-faceted survey by the China Industry News reporter, most industry insiders still believe that China's excavator industry will not experience a large-scale price war similar to the loader industry, at least for the time being, but industry consolidation is imminent.
The reason is that China's excavators do not yet have some conditions for playing a price war. First of all, due to the strong presence of foreign excavator brands, China's excavator industry is different from the loader, and local excavator companies do not yet have the industry's dominant power. Foreign companies have no incentive to aggressively reduce prices on a large scale, and there is no precedent; even if local companies provoke price wars, the likely outcome is that price cuts cannot be exchanged for the market.
Secondly, the huge investment in excavator production itself follows the pattern of high input in exchange for high profits, and the use of large price cuts can only hurt oneself.
Second, the excavator's sales model is different. Almost all of them are paid in installments by way of credit. If they provoke a price war, companies will bear huge back pressure and will be difficult to support.
In fact, since 2005, the price curve of excavator products has been rising. Most of these factors depend on the increasing raw material prices. However, there is no accurate data to support. The final result of the interaction between the excavator's price increase and the increase in cost has led to gradual dilution of its profits. And this may be one of the factors that will trigger the price war.
At the same time, due to the large differences in scale, internal management forms, and different marketing policies, the gains and losses of different companies in the same environment will be very different. At present, there is still an ongoing sales war. It is no doubt that excavator companies and their agents have no small cost.
It is foreseeable that if the market has been oscillating in the past two years, excavator agents will take the lead in completing the “shuffleâ€, and some small and medium-sized excavator companies with annual production of less than one thousand units and no policy and capital support will be followed. Reorganize or disappear completely.
Table 2 shows the capacity expansion charts of major domestic excavator companies in recent years, from which one can see the confidence and expectations of companies in the market, although such confidence requires more rational guidance.
Related reports China's excavation machinery industry encountered "10 ambush" (on)
Recently, due to the consistent support for domestic films, reporters and friends went to the cinema to see the “The Banquet†depicting the struggle between the Chu and Han. At the end of the movie, even though Xi Chu Bawang Xiang Yu and the brave man of “the power to exorcise the world†were excelled. The Chu Army was also incompatible with the "ambush of all sides" laid by Liu Bang and Han Xin.
In fact, this is a story that people are familiar with, but the combination of the 10 major problems in the rapid development of the current excavation machinery industry that the Secretary General of the China Construction Machinery Industry Association Mining Machinery Branch Li Hongbao told the China Industry News reporter, the reporter felt, The Chinese excavation machinery industry, which has crashed from high altitudes to the ground, is also experiencing “domestic ambush†internally or from a host of unfavorable factors, and the opponent is not that simple.
According to Li Hongbao, currently, in addition to the structural overcapacity, irrational sales methods that make the market competition increasingly fierce, and the core parts and components subject to the three familiar issues, the Chinese excavation machinery industry faces the following seven major problems.
The increase in industry inventory pressure is due to the blind sales of raw materials and excess reserves of raw materials caused by hot selling in the first half of 2011. On the other hand, the sales side is rapidly shrinking. The chilling and hot markets hurt the entire industry can not be overlooked, the industry's current concerns about inventory pressure and bad debts are increasing. Some of the first-tier and second-tier manufacturers began to adjust their production schedules, to reduce production to respond to the sharp rise in inventories, and at the same time increase their efforts to collect early-stage receivables. According to statistics, in the first half of 2011, the growth rate of construction machinery inventory was as high as 58%. Pre-stocking needs time to digest, and the suspension of infrastructure projects makes the collection of accounts receivable more severe. Under the current economic situation, if credit is not significantly relaxed, it is foreseeable that the excavating machinery industry will face suffering in the first half of this year.
Insufficient innovation capacity The phenomenon of product homogenization has been expanded Currently, there are not many core technologies with completely independent intellectual property rights in excavator products, and “clone†products occupy a large proportion. According to statistics, 59% of the respondents believe that the main issue that restricts the development of China's mining machinery industry is the issue of "technological innovation." At present, the technology for excavating machinery in the country is almost completely open. The entry threshold for the industry is low and the homogeneity is serious. It is difficult for domestic manufacturers to provide competitive products on higher-grade models. In 2011, the market share of domestic excavators increased significantly, but due to repeated investment, structural overcapacity, dependence on imports of core components, and lack of technical personnel, the status of low-level, homogenous, and disorderly competition remained unabated. .
Increasing pressure on costs is becoming more apparent At present, constraints from the mining industry's upper reaches include two aspects: one is the increase in the cost of import of parts and components, and the other is the rise in the price of steel raw materials. Both of these factors are related to world inflation. On the one hand, the rising price of parts and components brings great risks. Due to the increase in parts prices, about 70% of China's mining machinery industry's profits are eaten by imported components. On the other hand, raw material prices are rising. As the prices of raw materials, energy, labor, logistics and other factors of production continue to rise, the cost of the entire construction machinery manufacturing industry is also rapidly rising.
The main raw material for excavating machinery products is steel. The sharp rise in steel prices will inevitably bring greater cost pressure and negative impact on the industry. Due to the impact of the 65% increase in international iron ore benchmark prices in the new year and the low level of domestic steel stocks, domestic steel prices have experienced an explosive rise, and successive years of rising shipping costs have also pushed up steel prices.
Due to the strong presence of foreign brands, the argument for the excavator industry's discourse power has increased. But with or without the fight, the industry is advancing toward the point of consolidation and upgrading.
Will the excavator industry repeat the same mistakes, follow the footsteps of the loader, and play a huge, tragic and tragic, and far-reaching price war at the beginning of this century? This may be the proposition that the Chinese construction machinery industry, which has undergone rapid growth for more than a decade, is most unwilling to mention but has to face it.
The haze of oversupply after overhang has been overhanging the top of the head. The sales sentiment after the macro-control has rapidly dropped from the top to the bottom, and the sales promotion methods under the sluggish market seem to indicate that the Chinese construction machinery industry will once again fall into the trap. Ten years ago history.
On that occasion, the main product loader chose the most direct and bloody way to end the chaos battle of price wars, and this time?
Excavator "Great Leap Forward"
Around 2005, local Chinese companies represented by Sany, Liugong, and Xiagong began to exert themselves as excavators, the most representative products in the field of construction machinery. Prior to this, this market was divided up by foreign-funded enterprises, which accounted for more than 90% of the market share for a long time.
At the same time, a large group of engineering machinery, such as XCMG, Zoomlion, and Longgong, followed the production of excavators, and quickly formed scale. Even Wuliangye, heavy truck giants China National Heavy Duty Truck, and shipbuilding private enterprises Rongsheng Heavy Industry also rushed to join the excavator industry.
Overnight, almost all construction machinery companies have launched an excavator production line with a production capacity of as little as one thousand units and as many as 100,000 units. The capital of each road fell from the sky, and the central enterprises privately set up their troops here.
Behind this, is the huge "rigid" demand for construction machinery products brought about by policy investment in China's real estate sales, high-speed railway leap forward, and urban-rural infrastructure construction in recent years. A group of ordinary farmers who put down Shantou to participate in the construction of the project and turned it into a user of construction machinery has become the most powerful and fundamental endogenous power source in the excavator and even the entire construction machinery market.
Correspondingly, construction machinery manufacturers introduced credit sales models (instalments, financing leases, etc.) in due course, which greatly stimulated the desire of users to purchase. At the same time, such equipment as excavators, which are frequently worth millions of yuan, and which previously only large industrial and mining enterprises have the ability to purchase, have gradually become common households as a type of industrial consumer goods due to the diversification of payment methods. A large number of new users have thus emerged.
Since 2009, sales of excavator products have increased dramatically and reached a high point in 2010. This year, China sold a total of 165,000 sets of excavators, setting a new global record. Just a few years ago, the annual sales volume of excavators in our country remained stable below 30,000 units.
In March 2010, the monthly sales of excavators nationwide exceeded 30,000 units. This is not only the first time in the history of excavators in China, but also unique in the world, and China has become the world's largest excavator market and output country. .
In 2011, although the excavator market went through the curve of highs and lows with the macro environment, the above records were rewritten in March. The 24 major excavator manufacturers of the month’s statistics totaled 43,000 excavators. The year is expected to increase by 10% year-on-year, thus approaching the scale of 180,000 units.
This "brilliance" once again exacerbated the enthusiastic enthusiasm of manufacturers to pounce on excavators. Until now, there are still unfamiliar new faces in the excavator industry. They are quite ambitious; and the manufacturers that have been among them have shaken up the banner of expansion. The plan is huge.
Under such "barbarous growth" in the debate over overcapacity, an unavoidable problem has emerged - overcapacity.
According to incomplete statistics from the China Construction Machinery Industry Association, as of the end of 2011, the actual and planned production capacity of excavators in China has reached 720,000 units.
Yes, 720,000 units! This is 4.36 times sales in 2010. If nothing unexpected happens, this will also be exactly 4 times the amount of excavator sales in China in 2011 (total sales of 169,078 units from January to November).
In this regard, there are differences in the industry's attitude.
The optimists pointed out that most of the 720,000 units are planned production capacity, and they have a lot of water, which is not practical. Moreover, companies are not fools. Planning to “exaggerate†may be a gimmick. In the face of actual market changes, all plans will be adjusted at any time. Moreover, such "overcapacity" may be an "ecstasy" thrown by individual companies in order to confuse their competitors in order to confuse audiovisual use.
Second, how large is the Chinese excavator market? The peak of capacity and geometry? Xia Gong President Cai Kuiquan once made an estimate: Taking Korea as a reference, the peak of infrastructure construction in history has pushed the construction machinery market to the top, when the country's excavator annual sales reached 15,000 units. The land area of ​​China is nearly 50 times that of South Korea. Regardless of the large number of empty areas in the northwest, Japan’s 15,000 units will be multiplied by 50 to hit 40%, which is 450,000 units, which is the peak of China’s excavator market capacity. About 450,000 units will be around.
This kind of pre-judgment logic is not strict, but the current annual sales volume of nearly 200,000 units is probably not the historical peak of the Chinese excavator market.
There are also many pessimists who focus on the personal experience and judgment of the current excavator market. According to an independent survey conducted by the enterprise market planning department, the actual production capacity of domestic excavators as of the first quarter of 2011 has exceeded 300,000 units. In other words, under the premise of not expanding production capacity in each company in 2011, the sales volume will double and it will be possible to digest these excess capacity.
What makes it even more worrying is that the expansion plans previously formulated by many companies will basically reach their capacity in the next year or two. According to its estimation, by the end of 2012 to the middle of 2013, the sum of actual excavator production capacity in China will reach The scale of 450,000 units, and the market capacity at that time may still be about 250,000 units. This means that nearly half of the production capacity will be in excess.
In fact, both views are self-evident, but overcapacity is an accepted conclusion in the industry. It is difficult to accurately measure the actual production capacity, and the real demand for the market is inestimable. This excess capacity cannot be grasped. This also led directly to the company's judgment on the direction of the industry.
However, if we stand at a higher level and examine it with a historical and open perspective, “moderate overcapacity†will lead to increased competition, which will lead to an increase in industry technology, service levels, and lower production, management, and operating costs. With the survival of the fittest, the industry as a whole will eventually develop and progress. In fact, this route has been confirmed in many industries.
Of course, in this development process of “volume inflows—intensive competition—industry reshuffle (bankruptcy or success)—stabilityâ€, the market will naturally choose companies that are worth living, and eliminate companies that are not competitive. Obviously, the current excavator industry is standing at the crossroads from "competition" to "shuffle."
"Infighting" has been a decade ago, the Chinese loader industry has been staged due to overcapacity leads to steep decline in profits, desperation only with the price of a desperate battle of a tragic scene --- price war. The current excavator industry seems to be moving in a dangerous direction along this similar path.
At present, excavator manufacturers have not used direct price cuts to start killing, but they have been fiercely fighting for various kinds of promotional activities.
Due to the sudden outbreak of the excavator market in 2009, the surge in the sales of major excavator brands has surged after 2010, especially in late 2010 and early 2011.
Sending accessories, gift cars, cash back, house awards and other promotional methods are endless.
In some commercial activities for the purpose of sales promotion, the raffle link has become the focus, and the curiosity continues. According to some media reports, customers who have paid the deposit can all get the chance to participate in the lucky draw at the fair, with prizes ranging from a few thousand dollars to as much as a million dollars. What's more, a sweepstakes means winning and will never let you go empty handed.
Taking a local brand Jiangsu agent as an example, all customers who have paid a deposit can participate in the lucky draw. The third prize is 3,000 yuan, the second prize is more than 30,000 yuan, and the first prize is 80,000 yuan and two special prizes. The prizes are for each SUV car; for a Japanese brand Beijing agent promotion sweepstakes, customers who purchase excavators can participate in the prize for the mini excavator; another Japanese brand is directly involved in the lucky draw of Henan agents. Give users rewards for commodity housing; in an agent sales promotion conference in Anhui, the special prize is as high as 1 million yuan.
Such a "draft drawing" is already equivalent to a discount promotion, which is exactly a substantial price reduction. The competition between excavator brands has gradually been separated and ignored the product itself, deducted as a promotional tool and agent strength Competition.
Another competitive model is to reduce business conditions, in exchange for customer orders for the price, excavator industry in the past one or two years has become commonplace. Among them, the down payment is the most common, and even some regions and some agencies have already made zero down payment sales.
It is rather surprising that this approach is not only domestically owned brands. According to industry sources, some agents of international brands such as Komatsu and Volvo have also adopted a zero down payment or low down payment strategy to compete. These unconventional methods that have been used by some of the newcomers to achieve rapid business expansion seem to be fully spreading and gradually lead the excavator industry into a distorted and radical terrorist trap. At the end of this road, it may be a fierce price war with the loader industry.
Coming soon, the large-scale price war has not yet broken out. However, the dark sales campaign from the end of 2010 to the beginning of 2011 has caused excavator companies to be jealous.
According to statistics, in March 2011, China's excavator market hit another record, but from the second quarter, the market sales plummeted. As of November 2011, the decline momentum has not yet been attenuated. The month's excavator sales decreased by 37.90% year-on-year. Set a new low during the year. This was interpreted by numerous industry insiders as the overdraft that led to the market demand for sales promotion, that is to say, when the grain was sold.
Table 1 shows the sales growth rate of the Chinese excavator market from 1999 to 2010. It can be seen from this that the excavator industry's rapid development momentum in the past ten years, although it has experienced ups and downs.
The judgment based on the macro environment and the trend of the industry in 2012 has exacerbated many people's worries about the forthcoming large-scale price war in the excavator industry.
In their view, the current profit rate of excavator products is still high, and there is room for price reduction. Second, the huge pressure of overcapacity, the unstable macroeconomic situation, and the homogeneity of China's excavator products are serious, and the self-control of core components has not yet been resolved. The chance of companies winning the market by relying on technology and quality is minimal. If market conditions change, a price war may be inevitable. The current sales campaign is actually a precursor to a large-scale price war. This "potential energy" is gradually accumulating. It is pessimistically expected that within two years, the price war may erupt.
However, this view is not the current mainstream. In a multi-faceted survey by the China Industry News reporter, most industry insiders still believe that China's excavator industry will not experience a large-scale price war similar to the loader industry, at least for the time being, but industry consolidation is imminent.
The reason is that China's excavators do not yet have some conditions for playing a price war. First of all, due to the strong presence of foreign excavator brands, China's excavator industry is different from the loader, and local excavator companies do not yet have the industry's dominant power. Foreign companies have no incentive to aggressively reduce prices on a large scale, and there is no precedent; even if local companies provoke price wars, the likely outcome is that price cuts cannot be exchanged for the market.
Secondly, the huge investment in excavator production itself follows the pattern of high input in exchange for high profits, and the use of large price cuts can only hurt oneself.
Second, the excavator's sales model is different. Almost all of them are paid in installments by way of credit. If they provoke a price war, companies will bear huge back pressure and will be difficult to support.
In fact, since 2005, the price curve of excavator products has been rising. Most of these factors depend on the increasing raw material prices. However, there is no accurate data to support. The final result of the interaction between the excavator's price increase and the increase in cost has led to gradual dilution of its profits. And this may be one of the factors that will trigger the price war.
At the same time, due to the large differences in scale, internal management forms, and different marketing policies, the gains and losses of different companies in the same environment will be very different. At present, there is still an ongoing sales war. It is no doubt that excavator companies and their agents have no small cost.
It is foreseeable that if the market has been oscillating in the past two years, excavator agents will take the lead in completing the “shuffleâ€, and some small and medium-sized excavator companies with annual production of less than one thousand units and no policy and capital support will be followed. Reorganize or disappear completely.
Table 2 shows the capacity expansion charts of major domestic excavator companies in recent years, from which one can see the confidence and expectations of companies in the market, although such confidence requires more rational guidance.
Related reports China's excavation machinery industry encountered "10 ambush" (on)
Recently, due to the consistent support for domestic films, reporters and friends went to the cinema to see the “The Banquet†depicting the struggle between the Chu and Han. At the end of the movie, even though Xi Chu Bawang Xiang Yu and the brave man of “the power to exorcise the world†were excelled. The Chu Army was also incompatible with the "ambush of all sides" laid by Liu Bang and Han Xin.
In fact, this is a story that people are familiar with, but the combination of the 10 major problems in the rapid development of the current excavation machinery industry that the Secretary General of the China Construction Machinery Industry Association Mining Machinery Branch Li Hongbao told the China Industry News reporter, the reporter felt, The Chinese excavation machinery industry, which has crashed from high altitudes to the ground, is also experiencing “domestic ambush†internally or from a host of unfavorable factors, and the opponent is not that simple.
According to Li Hongbao, currently, in addition to the structural overcapacity, irrational sales methods that make the market competition increasingly fierce, and the core parts and components subject to the three familiar issues, the Chinese excavation machinery industry faces the following seven major problems.
The increase in industry inventory pressure is due to the blind sales of raw materials and excess reserves of raw materials caused by hot selling in the first half of 2011. On the other hand, the sales side is rapidly shrinking. The chilling and hot markets hurt the entire industry can not be overlooked, the industry's current concerns about inventory pressure and bad debts are increasing. Some of the first-tier and second-tier manufacturers began to adjust their production schedules, to reduce production to respond to the sharp rise in inventories, and at the same time increase their efforts to collect early-stage receivables. According to statistics, in the first half of 2011, the growth rate of construction machinery inventory was as high as 58%. Pre-stocking needs time to digest, and the suspension of infrastructure projects makes the collection of accounts receivable more severe. Under the current economic situation, if credit is not significantly relaxed, it is foreseeable that the excavating machinery industry will face suffering in the first half of this year.
Insufficient innovation capacity The phenomenon of product homogenization has been expanded Currently, there are not many core technologies with completely independent intellectual property rights in excavator products, and “clone†products occupy a large proportion. According to statistics, 59% of the respondents believe that the main issue that restricts the development of China's mining machinery industry is the issue of "technological innovation." At present, the technology for excavating machinery in the country is almost completely open. The entry threshold for the industry is low and the homogeneity is serious. It is difficult for domestic manufacturers to provide competitive products on higher-grade models. In 2011, the market share of domestic excavators increased significantly, but due to repeated investment, structural overcapacity, dependence on imports of core components, and lack of technical personnel, the status of low-level, homogenous, and disorderly competition remained unabated. .
Increasing pressure on costs is becoming more apparent At present, constraints from the mining industry's upper reaches include two aspects: one is the increase in the cost of import of parts and components, and the other is the rise in the price of steel raw materials. Both of these factors are related to world inflation. On the one hand, the rising price of parts and components brings great risks. Due to the increase in parts prices, about 70% of China's mining machinery industry's profits are eaten by imported components. On the other hand, raw material prices are rising. As the prices of raw materials, energy, labor, logistics and other factors of production continue to rise, the cost of the entire construction machinery manufacturing industry is also rapidly rising.
The main raw material for excavating machinery products is steel. The sharp rise in steel prices will inevitably bring greater cost pressure and negative impact on the industry. Due to the impact of the 65% increase in international iron ore benchmark prices in the new year and the low level of domestic steel stocks, domestic steel prices have experienced an explosive rise, and successive years of rising shipping costs have also pushed up steel prices.
Roots Vacuum Pump For Paper Plant
Roots Ump,Roots Booster Pump,Diaphragm Pump Vacuum,Root Blower Compressor Working
Shandong Heli Machinery Co.,Ltd , https://www.chinaheliblower.com