Although the aftermarket is a huge "cake", why do manufacturers and agents generally believe that the aftermarket looks huge but can't eat it?
In recent years, with the continuous increase in sales of construction machinery and equipment and the continuous increase in the number of possessions, the demand for aftermarket business services has gradually expanded. Take the excavator market as an example. In the life cycle, the ratio of aftermarket maintenance and spare parts potential to the price of new equipment is almost 1:1. Aftermarket business can bring business revenue beyond equipment sales and higher profits. . The current aftermarket for repair services and accessories has a scale of hundreds of billions, and the second-hand equipment and leasing market has reached a scale of trillions. The construction machinery aftermarket has become a business sector that cannot be ignored in the industry.
However, compared with the mature construction machinery market in Europe and the United States, the problems of low management level and insufficient competitiveness of domestic enterprises need to be further improved and explored.
The gap is obvious, and the domestic aftermarket profits are low
In the traditional market of the construction machinery industry, maintenance and accessories are treated as passive after-sales service after equipment sales. Now, OEMs treat them as a new business model. Based on the development of the whole machine business, they have formed the first Two types of post-market development business.
The fractal innovation of this model not only injects new growth momentum into the development of OEMs, but also makes the development of agents more balanced, because when the whole machine market fluctuates greatly, the aftermarket revenue ensures the survival of agents , And the business of the aftermarket is mainly affected by the amount of equipment and the operating rate, which is much smaller than the fluctuation of the whole machine market.
Two-thirds of profits in mature markets in Europe and America come from aftermarket business
In mature markets in Europe and North America, companies attach great importance to the development of the aftermarket. This is an important link for construction machinery and equipment OEMs and agents to achieve service premiums. The golden section of the profit structure pursued by companies is that two-thirds of the profits come from the aftermarket. , One third comes from new equipment sales. In this way, when the new machine sales market declines, the aftermarket revenue is an important guarantee for the company's "survival".
After-market business profits of domestic agents account for less than 40%
According to the survey data of the China Construction Machinery Industry Association, in 2020, the sales of the whole machine will contribute an average of 64% of the operating profit of the agents, and the profit of the after-market business will account for 36%, including the sales of accessories and the average 19.9% of the agent group. Operating profit; warranty service contributes an average of 9.1% of the operating profit of the agent group; the second mobile phone sales business is in a state of loss; operating leases contributes an average of 3.9% of the operating profit of the agent group; out-of-warranty services and other maintenance service businesses contribute to The average operating profit of the agent group is 3.2%; financial services and other businesses contribute an average of 0.9% of the operating profit to the agent group.
Poor risk resistance, low level of domestic aftermarket operations
The post-market absorption rate (that is, the ratio of post-market revenue to enterprise operating costs) is an important indicator to measure the after-market business operation of construction machinery agents. In the European and American markets, the aftermarket contribution of construction machinery agents accounts for 50% to 60% of the company’s turnover. The absorption rate of some outstanding agents has exceeded 100%. Even if they do not sell new equipment, these agents still Can survive, which gives the company a strong ability to resist risks. China has the world's largest possession of construction machinery and equipment, but the market absorption rate after agents is mainly hovering at a low level of 10-20%.
According to the survey data of China Construction Machinery Industry Association, only 3.2% of agents have an absorption rate of more than 60% in the market after agents in 2020, and agents with an absorption rate between 40% and 60% account for 8.8% of the agent group. Agents with an absorption rate between 20%-40% account for 40.0% of the agent group, and agents with an absorption rate between 10%-20% and less than 10% account for 24.0% of the agent group. %.
Analysis on the Competition Pattern of Enterprises in the Construction Machinery Aftermarket
In the field of China's construction machinery aftermarket, there are mainly three types of participants: manufacturers and brand agents, parts suppliers, small parts stores and repair shops. There are cooperation and competition among them, forming the current domestic construction machinery industry. The core ecosystem of the market.
Where is the development path of the domestic aftermarket?
Reject rigid sales, only sell high-priced original parts
In recent years, with the fierce competition of excavators, peers have maliciously quoted prices, which has led to the deterioration of desk shift fees. Coupled with the impact of environmental protection policies, the owner is struggling to survive in the cracks. In this context, the more powerful equipment owners naturally reduce the use of original accessories. However, manufacturers only allow agents to sell original parts, which undoubtedly creates a dilemma for customers.
In this regard, as an accessory manufacturer, we should dig deep into customer needs and provide different levels of parts for customers with different needs.
Transition from product-driven growth to service-driven growth
Customer reputation and repeat customers are the intangible assets of a company. If a company only focuses on new customers but loses old customers, it is easy to outweigh the gains.
The aftermarket is an ecosystem built by companies around customers. The purpose is to help customers make money, retain old customers, and build a good reputation. Making money is a matter of course. If you only focus on the money in the customer's pocket, whether it is high-priced parts or free services, it may damage the ecological environment of the aftermarket and ultimately lead to the loss of customers.
Construction machinery companies need to put down their stance, pay attention to aftermarket customer service while doing a good job of products, help customers do more profitable things, and regain customer trust and love.
