Looking back on the vicissitudes of construction machinery in the past ten years, and looking forward to the development opportunities in the next ten years, at the 2020 China Construction Machinery Industry Association annual meeting, Tiejia.com has witnessed one thought feast after another. One of the peak conversations involving agents who survived the actual "cannon fire" is a lot of highlights and full of dry goods! They face the current price wars, both "price wars are overwhelming", "don't watch the war, you must participate in the war", "fate is in your hands, and you can make yourself bigger and stronger, and you can go very far." "A strong voice.
Under the 2020 epidemic, China will become the only growing country in the world, with a growth rate of 2% to 2.2%. Construction machinery has grown against the trend, and sales of excavators have increased by more than 50% for several consecutive months. Let’s take a look from the perspective of an agent. What happened this year and what challenges will the construction machinery industry face?
1. What changes have been made in the development of construction machinery industry in the past ten years? What are the risks and opportunities after the price war?
Fan Jianshe: Tiejia.com and Tiejia 2 mobile phones have been in operation for ten years, and the industry trend has almost developed in these ten years. Ten years ago, borrowing the country's 4 trillion yuan of infrastructure to build Dongfeng, many post-80s users bought excavators to enter the industry. They obtained information from the Internet, and Tiejia.com was established. Later, these grown-up users began to buy second mobile phones in the last upward cycle. With the development of the two cycles of the industry, the second mobile phone also came into being. 2016 was a period of decline in new phones, when everyone could make a second phone. In 2017, new machines broke out, prices fell, and the service sector experienced great changes. Second-hand car dealers faced the fate of transformation and bankruptcy. It can be seen from the development history of Tiejia that the service providers of construction machinery are particularly affected by upstream changes.
Duan Zhijun: The price war has become unbearable, and now there are not many profitable agents. This year's new phone business has caused the company to lose nearly 100 million yuan, and the second mobile phone lost 80 million. I am very confused about the current ecology. I dare not purchase equipment anymore. I am waiting and watching. I believe that many users will hold the same attitude.
Yang Chisheng: In the past 10 years, agents have been recruiting business customers. Now they are expanding their platforms, building strategies, and upgrading systems. The size of the company and the complexity of the business are not the same, and the gross profit is now greatly reduced. In the past, money was made with asymmetric information, but now it depends on brand and quality, bargaining power, and company size to achieve performance growth.
Cao Weiguo: From the perspective of the association assuming the responsibility of agents, I want to focus on the price war. At the half-year meeting of the Association this year, everyone raised a question, who started the price war, the manufacturer or the agent? If the manufacturer only wants the market share, the agent will not have the market share. At this time, agents do not rely on their own bargaining power and service capabilities to win, but on price. Another question is, who is fighting the price war? Who can win? We never lack courage, what we lack is how to let go.
Lu Tao: We are a leaser. From this perspective, look at the changes in the construction machinery industry over the past decade. If the manufacturer keeps reducing prices, the profit and recycling plan of the leaser will be hindered, and the profit of the lease will be thinner and can only be supplemented by the second mobile phone. Users also expect the renter to provide a five-star experience at a three-star price. Under multiple pressures, our lessor is like Yang Bailao. After a year of hard work, not only did not make money, but also owed debts.
2. Where will it go in the next ten years?
Fan Jianshe: "The road the world has traveled must be its own." We have to see whether the construction machinery industry can learn from the experience and lessons of foreign companies or the successful models of other industries. Take Caterpillar’s largest agent as an example. In 2019, sales reached US$50 billion, gross profit 24.7% and net profit 3.3%. However, the company's profit structure is completely different from that of domestic companies: new phones account for only 38%, services and accessories account for 52%, and second mobile phones and leasing account for only 8%.
Although it is difficult for Chinese agents to learn from in the short term, the main profit income of agents now comes from the new machine business, but the end result of agent development must be a high degree of brand concentration. When users are familiar with the characteristics of each brand, the future sales link will From business to sitting business.
Based on this judgment, in the agent link, I predict there will be two changes in the future:
1. In the end, there may be only three domestic agent brands, and the existing offline agent model can be used;
2. The remaining 5-10 brands will share sales and service networks because the sales and gross profit of a single agent are not enough to support independent operation.
Under this development trend, there are two roads in the future:
1. Make full use of digitization and quickly reduce costs by purchasing SaaS software at low cost for its non-core links. For example, the cloud shopkeeper business provided by Tiejia currently has in-depth cooperation with Lei Shing Hong.
2. Significantly reduce personnel management, and the method of relying on personnel offline coverage must be changed as soon as possible, otherwise it will be difficult to maintain gross profit. It will be very dangerous when the next downlink cycle arrives.
Liu Guoliang: In the future, China's service providers will develop in the direction of specialization and networking. When Xingbang Heavy Industries sells its products overseas, it will also sign a service provider when it signs an agent. According to past experience, after all, overseas is beyond reach. Compared with domestic after-sales service, it will not keep up with the changes in customer needs. However, when packaged to third-party professional service providers, these foreign third-party service providers provide no difference. Service, the same quality service will be provided to unconnected brands. In this way, for the customer, the after-sales problem of the product is solved; for the manufacturer, it is possible to send fewer personnel. Through cooperation with foreign professional service providers, we have found that the effect is very good.
Huang Ning: 1. The integration of the Internet and Double Eleven, achieving 2 million sales of accessories, how to guide customers to buy on the Internet and cultivate customer habits. 2. In the future, agents can survive and improve their own capabilities. Adaptability, service ability, and anti-risk ability. The sales of Douyin has also become a common phenomenon, and business can still be carried out by trying. 3. There will still be major cyclical changes in the future, and the major landslide after 2012 is even more tragic than this.
Zhou Chijun: 1. Online and offline blessing, close to the scene, industrial Internet. Sharing economy, bigger used cars, construction machinery insurance, spare parts, selling diesel, and discrete fragments of sound can be combined. 2. Manufacturers and factories lay out the industrial chain, in-depth integration of online and offline; in-depth integration of the industrial chain. 3. Strengthen cooperation. If you are partners, you can be lighter against your opponents in fierce competition.
Duan Zhijun: 1. Be strong and improve the ability of overhaul; 2. Improve the competitiveness of spare parts; 3. Manufacturers and agents should unite; 4. Agents should pay attention to risk control when leasing.
Yang Yihua concluded: In the next ten years, the development of construction machinery can consider these directions: shared services, cooperation and sharing; online and offline integration, online and digital; single leasing to comprehensive leasing; the industry ecological chain will be both prosperous and lost.
3. RCEP will abolish tariffs in the 10 China-ASEAN countries. If it takes effect, what will be the impact on construction machinery services?
Fan Jianshe: 1. Whether it is APEC or RCEP, any organization must have a leader. From the perspective of the intensity of capital, talents, and technology, the leader of China's construction machinery industry ecosystem is still the upstream manufacturer. The concept of the manufacturer and the attitude of the downstream partner are crucial.
In more than 100 years of development of Caterpillar, it has experienced many economic crises. In each crisis, Caterpillar will not hesitate to help the agents, even at the expense of supporting the workers of the agents and supporting their agents to tide over the difficulties. Manufacturers must think clearly about their own sales and services, whether they will choose direct sales or agency systems in the future? Without thinking clearly, there will be many follow-up questions.
2. Under the circumstance of declining profits of agents and fierce competition, everyone must integrate online and offline and stay together to resist risks. Tiejia is willing to provide its own meager power to the industry, such as sharing user analysis and transaction data.
3. The second mobile phone and leasing are the main business of the agent for a long time. In 2020, the transaction volume of Ironclad 2 mobile phones will reach 20,000 units, which will be reduced by 30% from the price of new phones. Others, such as Carter's GX excavator, directly affect the willingness of second-hand car dealers to get cars. Second, in terms of mobile phone disposal and leasing, everyone is in a group to keep warm. If profits are highly concentrated in a certain link, we, the companies that provide service providers in the middle of the ecological chain, will be under greater pressure.
Zhou Chijun: The change is the rapid rise of domestic brand excavators. By the end of 2020, the market share will exceed 70%. This year, it will deliver a good result. There are many reasons behind this achievement. Sany has been doing global industry research and analyzing the success logic behind construction machinery companies. At the same time, it also studies the successful experience of more than a dozen related industries in China to see what are the key factors for their success and what are the basic characteristics. The logic behind the success, if everyone can settle down to analyze the logic behind the following success and come to common points, this will be beneficial to the industry.
Cao Weiguo: 1. As the representative of the agent of the association, I will definitely fulfill the responsibilities and obligations of the channel dealer. Together with the brand, defend the value of the brand. We must be strong ourselves and at the same time put forward requirements for upstream brands to achieve mutual wins. 2. Agents should not ask the manufacturers for policies, save themselves, and live a healthy and sustainable life. There will be many problems in the future, and alliances will also have contradictions. Cooperation in the construction machinery industry must have its own irreplaceable value, and there will be many changes in the future. When I was learning to drive in 1993, in a word, driving well in front of you will always go unimpeded. If you drive poorly, there will always be traffic jams ahead. In short, be prepared in advance.
Liu Guoliang: 1. More open, domestic and foreign markets, 2. Fair opportunities for everyone, and test everyone's ability to go to sea; 3. Domestic prices do not fight internationally.
4. Use one sentence to convey good wishes to the industry
Cao Weiguo: Mission Agent Association. Channels are an important link in the implementation of China's construction machinery brand strategy. Agents, directly operated companies, and capable agents are scarce resources. Construction machinery agents have begun to change the original business model of only making complete vehicles, and we are exploring the aftermarket of agents in the stock market.
Zhou Chijun: Now is the great moment.
Lu Tao: The next five years, the golden age of the leasing industry
Duan Zhijun: The prospect of fierce battle in the Red Sea is bright.
Liu Guoliang: Sharing glory and disgrace, advance and develop together on the same boat
Yang Chisheng: Destiny is in your own hands. Only by making yourself bigger and stronger can you go far
Fan Jianshe: In the face of uncertainty, embrace change; participate in the war, not watch the war
