Construction machinery industry encountered development bottlenecks

After experiencing high-speed growth for more than 10 years, suddenly encountered a severe winter of severe overcapacity, the growth model of China's construction machinery industry is facing challenges.

Homogeneous competition makes after-sales service almost unprofitable. China is implementing reform and opening up in the context of globalization. Chinese manufacturing has developed rapidly through the introduction of technology, and its competitiveness has not only manifested its advantages in production costs, but also demonstrated its closeness to the market. Service advantages, many products early replacement of imported products are to win customers with free services. Manufacturers respond quickly to make up for deficiencies in early product quality, gain opportunities for customer use, enhance product performance, and stabilize quality. After gaining a certain market share and customer reliance, manufacturers gradually gain product pricing capabilities and post-market service revenues.

Obviously, China's construction machinery industry with product assembly and scale is not smooth from the market share of products to after-market services. At present, companies face two difficulties: First, the main core components still rely on imports, and most of them take the channels of agents. After-sales service is left to the agents. The added value of the final repair service of the enterprise is only the difference between the parts and components procurement. The major profit is still taken by the core parts and service companies. Second, the industry competition is fierce in recent years and the products of the company are homogenous. Seriously, the competition is more reflected in the service sector. Decreasing the down payment and extending the free service have become important competition terms. Some excavators and loaders that have served three months in the past have been adjusted to one year. After mass production of excavator domestic brands, various promotions and wars began, including extending the service period, sending kits, and sending cars. China's products and equipment work with high intensity, high rental of engineering equipment, general equipment can recover costs in a single project, and since then equipment residual value and maintenance service income are not in proportion, customer maintenance enthusiasm is not high, maintenance services are almost unprofitable .

The slow development of the “remanufacturing” business is a serious shortage of resources. On the one hand, a large number of old and outdated equipment are out of service and are eliminated. Remanufacturing plays an important role in conserving resources, energy, and building a recycling economy. It also serves as a post-market service belt for enterprises. Come to a huge space. Since Jinan Fuqiang Power Co., Ltd., a joint venture founded by China Heavy-Duty Truck Group Co., Ltd. and British Lister Petter in 1998, mainly engaged in engine refurbishment and remanufacturing, Komatsu, Caterpillar, Liugong, Dingsheng Tiangong, Doosan, Weichai Power, Sany Heavy Industry, Zoomlion, and construction machinery dealers Li Xingxing, Wuhan Maxima, Shenzhen Mei Peng and other companies have all established remanufacturing business units. In reality, the biggest obstacle for manufacturers to invest in remanufacturing is reverse logistics. At the same time, remanufacturing equipment has no volume, and the selling price is lower than the new machine market price (usually 60% of the price of similar new machines), and it is good at mass manufacturing. For manufacturers, remanufacturing is obviously inefficient. Moreover, the remanufacturing of equipment is mainly the core functional components, such as the refurbishment and remanufacturing of engines, hydraulic systems, or gearboxes. There are still some core components in China that cannot be self-manufactured. Therefore, the remanufacturing business of complete machine manufacturers still drives suppliers. Interests. Agents are relatively close to customers, and the cost of reverse logistics is also relatively low. However, the business model of agents is trade. Their capabilities are more reflected in market development and maintenance of customer relationships, and lack of manufacturing experience, systems, and related talents. The team, and the large amount of funds invested, long input-output cycle, and remanufacturing technology are not mature, it is very difficult for general agents to step into the threshold of remanufacturing. So far, most of the remanufacturing business has not entered the profit stage, and some companies simply shut down this sector. Among them, the remanufacturing of core components such as Caterpillar and Weichai Power is easier to implement than the whole machine.

Wuhan Chollima is a remanufacturing company that is at the forefront of the industry. The company has implemented two phases of investment, starting with the single product remanufacturing model of simple disassembly, cleaning, and updating of core components, and began to explore the standardization, standardization, and processization of mass production. Manufacturing path, and customer financing options. Shenzhen Meipeng Machinery chose to use the professional ability to recycle old equipment at a low price, and after refurbishing the product, it sold at half the price of domestic excavators. More and more companies are still looking for ways to business models. More models are the model for joint ventures between manufacturers and agents.

Concentration of leasing business gradually increased the construction machinery industry chain to the top and formed a model of parts suppliers—brand manufacturers—brand agents—equipment leasing (owners)—end use customers. At present, manufacturers and agents are relatively concentrated, and the owners and end customers are very scattered. Among them, most of the owners are self-employed.

Since 2011, the growth in market demand hasn't reached the speed of growth in the stock of equipment. As a result, many owners have been unable to repay their purchases and a large number of equipment have been dragged back. According to the market reaction, the excavator dealers whose sales volume reached more than RMB 1 billion in the normal years have reached 50 million to 60 million yuan, or even more, because of the equipment backhaul and trade-in equipment. As a result, the concentration of inventory equipment naturally increases, forcing agents to seek to turn the equipment into a cost-effective path. Some agents have to choose the rental business that competes with customers.

In the early 1990s, the construction machinery industry was hard to find. In the face of opportunities for expansion of production by business enterprises, it coincided with the state's macro-control in 1993. As a result, market stocks suddenly increased, and construction machinery agents emerged. This round of rapid economic growth has formed a large number of social stocks. The large number of idle equipment that appears in the economic adjustment since 2011 will inevitably lead to a large number of owners abandoning equipment. The decentralized rental business tends to be concentrated, with the exception of some agents who are forced to “fall” into In addition to the leasing companies, a group of professional leasing companies based on business models will also be created.

Second-hand equipment auction sparked concern. On November 18th, 2012, several unknown young people in the field of construction machinery attracted the attention of the industry. On this day, Xuhui, Hebei suddenly gathered 500 workers from construction machinery manufacturers and agents. , the owner of the machine and the related media industry, China's first auction of construction machinery without auctions organized by Yiji Auction Company was held here. All 48 devices were sold on the same day. In 2013, Yiyi held a second auction in Xushui. The meeting once again attracted more than 300 people in the industry. So far, Yiji has held five auctions in China, including three special events for brand companies.

In the case of Yiji's entrepreneurs looking for a business model that is closer to the market and professional customers in the form of auctions, the Ritchie Bros., the world’s largest engineering machinery auction company, was observed for 10 years in China’s second-hand equipment. It was finally April 18, 2013. On the day of the fall of their auction in Tianyi, Beijing, 160 construction machines were sold on the same day and the number of participants exceeded 1,000.