Sewing machine industry: hidden behind the hot orders

“According to the statistics of 98 backbone machine manufacturers in the sewing industry, the total industrial output value increased by 53% from January to October 2010 compared to the same period in 2009, the sales value increased by 59%, and the industrial added value increased by 70%. With a 40% increase in output, a 115% increase in profits and taxes, and a profit increase of up to 125%, Yang Xiaojing, secretary-general of the China Sewing Machinery Association, has listed such a group of figures. This happens to coincide with the order blowout from the sewing machine industry beginning from the beginning of the year. Echoed.

The recovery of the industry from the beginning of 2010 does not seem to be a sign of a mid-stream break. However, there are always worries about the possible quality defects caused by rushing orders, the worries about the relationship between the zeros, and the sustainability of the explosive situation.

The bosses are not happy. "Though the current situation is not as good as it was in the previous two years, our output this year is almost 80% more than last year. But the days are still very bad. First, the production capacity can not meet the needs of the market. In order to guarantee quality, it is impossible to accept orders, and now I have almost rejected 40% of the orders. Second, due to the increase in orders and tight supply, our costs have also increased, such as overtime for workers. With a little extra cargo, we have to pay for overtime wages; if we don't have so many goods, we have to supply them in small batches, and batch transportation also makes transportation costs go up a bit. Then, I'm also hesitant to continue investing in expanding the scale of the company. Wait and see, after all, the entire industry chain has to be streamlined. There is a saying in the industry: "If you don't invest, you're going to die. If you invest it, you're going to die. Because the funds are converted into fixed assets." said Chen Qihong, general manager of Chongqing Zero Precision Machinery Co., Ltd. In the face of the difficulties and confusion he faced in the past year, he told reporters that the relationship between parts and components companies and machine companies, in 2010 in the market With the new changes, the integrity of the whole enterprise has been greatly changed under the effect of law, the phenomenon of the past zero down payment, arrears, etc. basically no. However, they really do not know whether this is a temporary improvement in order for the entire machine company to fight for spare parts supply. Once the relationship between supply and demand changes again, the zero-relationship relationship will not return to the vicious circle of the past.

Whole machine companies seem to be more concerned about whether the quality of products in this round of “order-taking” has been affected. In the last six months of July last year, some whole-machine business owners questioned quality issues because of a lot of overseas orders. The cargo ship has to “float” on the sea for three or four months, and feedback on information is lagging behind. It is understood that as of the end of 2010, some foreign trade orders have returned, but is this phenomenon still not the mainstream of the industry? Chen Hongmei, head of the Brand Department of Zhejiang Gems & Mechatronics Co., Ltd., told reporters: “This is mainly caused by small companies and some irresponsible companies. They deliberately relaxed parts inspections to meet current orders, and even parts do not test. This behavior is tantamount to killing chickens, and the temporary sales performance will in fact overdue customers' trust in the brand in the future, and they will not buy them again. Although our company is still in short supply this year, it is still based on business. The gradual increase in production."

What is the condition of the agent? “It can be said that this year, we were very nervous about getting goods from suppliers. Sometimes we have to order 500 orders. In the end, we may only get 100. We have to supply them in batches. In the past, the price and value of products in the industry had been inconsistent, and prices were always unable to rise, but this year we saw rising prices, such as clutch motors, which rose from 200 yuan to 300 yuan per machine when the supply was tight. Upstream and downstream, basically the link between parts and components companies supplying whole machine companies rose by 20%, and the whole machine companies supplied us with this piece up by 5%-10%.” Yang Yi’an, general manager of Beijing Lingyu Xincheng Sewing Equipment Co., Ltd. Say.

Finding the right solution to the problem For the price increase mentioned by Yang Yi'an, it is difficult for him to judge whether it is due to the relationship between supply and demand or whether the price mechanism has actually improved. The price issue is a cliché in the sewing machine industry. How can we improve the pricing power of companies in the market? Why is the price of industry products not yet rising in the context of this year's hot sales? At the just-concluded Fourth China Sewing Machinery Industry Market Development Forum, Zhai Xiaoming, Chairman of Zhejiang Gems & Mechatronics Co., Ltd., said in his speech: “Now the industry is very confused, and some products do not have profits and they do it in white. ... The industry is advocating the establishment of a brand, and if everyone places the service at a high level, it will drive the price to find a reasonable position." At the same time, Deputy General Manager of Standard Shares Zhu Xi also talked about this: "Only the quality of products continues to increase, The bargaining power of companies can be increased."

The problem was again led back to product quality. Yang Xiaojing also admitted in an interview that, in order to catch orders, there was indeed a phenomenon that “radish is not washed quickly” as long as someone wants to produce. "If customers find that the quality of the products is not enough, they will directly stop the cooperation with the brand. The blowout period of the industry is also a period of reshuffling, after all, this industry may be the responsibility of those who are responsible for the user to survive." Chen Hongmei also Speaking of quality issues is important to the long-term reputation of a company. When the Secretary-General Yang Xiaojing spoke about quality, he said: “The “product quality improvement and catch-up project” proposed by the association has entered a stage of further advancement, and relevant work will be carried out in some pilot projects in 2011 to ensure that the project is implemented. In particular, quality issues cannot be ignored. The key to winning a market for a brand depends on the diversity and quality of the products. Once the market recovers steadily over the past two years, the quality advantage will bring strong staying power to the company.”

In the interview with reporters, people in the industry generally reflected that after experiencing the continuous crisis of the first two years of crisis and the improvement of the situation in 2010, the entire industry is gradually returning to rationality, and the market order is also getting better. “Obviously, if we had a good cooperation with the manufacturers and had maintained a good degree of integrity, we would be able to secure a generous space for ourselves in the tight supply environment this year, and the manufacturers will also give you The relative supply of care, and those who had previously had a bad attitude and may have a serious payment, may face the dilemma of getting goods out of the way, so that everyone will have some reflection on the previous behavior, and in any case, this is to avoid disorder It is still very good to compete and create a healthy market order.” This seems to be a relief for Yang Yi’an.

But at the same time, Yang also had his worries: "After the financial crisis, many parts factories did not hold back and closed down. In 2011, many parts factories must be re-launched. Only motor factories are almost reopened now. There are 10 companies, and at the same time, some complete machine companies have started to produce some spare parts for the sake of picking more freely.” For this concern, Secretary-General Yang Xiaojing introduced to reporters: “Now in the country, there are about 1,000 parts and components companies. There are probably 600-800 enterprises in the whole machine industry, and for a mature industry, there should not be such a large number of enterprises at the same time.We also need to objectively judge the situation, and the situation in 2010 has improved, largely because of the downstream It is difficult to say whether the garment industry has such a large amount of demand for equipment that has been repressed in the past two years, so we also hope that business owners in the industry can have a better presence in the market. Rational judgment, do not blindly expand production, increase production capacity, or even invest in factories."

It is expected that the hot situation will continue. What will be the supply and demand relationship in the sewing machine market in 2011? Will this kind of hot order continue? Once the situation changes, when will the node probably appear?

Some of the owners and agents of the parts and components companies interviewed said that this demand shortage should continue into the first half of 2011 and even the first three quarters. First of all, although orders and production capacity of various companies have been greatly improved in 2010, this is relative to 2008 and 2009. Compared to the pre-crisis period of 2007, the current production capacity can only reach 70% at that time. Around the time it takes to recover to the 2007 level, it will take a while. Secondly, the increase in sales this time was partly due to the increase in the demand for electromechanical integrated sewing machines from the upgrading of the garment industry. The adjustment of the garment industry also requires a process. Finally, because of the insufficient production capacity caused by previous conversions and labor difficulties of some accessory companies, it is difficult to immediately restore production capacity.

Secretary-General Yang Xiaojing concluded: “It is estimated that with the continued upward growth of the apparel industry in the first half of 2011, there will probably be a 20%-30% increase in the sales of our sewing machine industry. Of course, this depends on many uncertainties. Such as the increase in labor costs, how to solve the problem of labor shortage, the country’s monetary policy, export policy, etc.”