Recently, the collapse of oil prices has turned negative, and auto parts suppliers have raised prices, which has led to speculations as to whether cars will usher in a wave of price increases like excavators. In fact, not only did it not raise the price of automobiles, but the automotive sector was squeezing profit margins and swapping prices for the market. In sharp contrast to this, excavators in the field of construction machinery have grown louder. Even so, many agents said that a machine is still hard to find in the market. Why the same situation has the status quo of ice and fire, iron armor net brings you the latest report.
Automobile vs. excavator
Automobiles stumbled, and sales in March fell by 43.3%; excavators rose, and sales in March rose by 11.6%
After all, it is demand.
The impact of the domestic epidemic has gradually dissipated, various industries have resumed production, and infrastructure construction has accelerated the demand for excavators. Excavator is a means of production, "excavator index" or even a barometer of economic development. However, the impact of the epidemic has affected many domestic industries. Most of the income of practitioners has declined to varying degrees. Unemployed people are also in the minority. When survival is a problem, who still has spare money to buy a car?
From the sales data of the first quarter of 2020 and March of cars and excavators, one or two can also be seen.
According to preliminary data from the China Association of Automobile Manufacturers (CAAM), China's new car wholesale sales in March fell by 43.3% year-on-year to 1.43 million units, and production fell by 44.5% year-on-year to 1.42 million units. In the first quarter of 2020, China's new car sales fell 42.4% year-on-year to 3.67 million units, while production fell 45.2% year-on-year to 3.47 million units.
According to industry statistics of the China Construction Machinery Industry Association, in March 2020, a total of 49,408 excavating machinery products were sold, an increase of 11.6% year-on-year. The 25 mainframe manufacturing enterprises included in the statistics in Q1 2020 will sell 68,630 sets of various excavating machinery products, a year-on-year decrease of 8.2%.
Although the sales data of the two cannot be the same, however, the single value of the excavator is not low compared to the price of the car. In the tide of China's manufacturing industry, they are also facing the tide of supply chain upstream companies reducing production, stopping production, and increasing prices, but they are facing different fate.
Automobile vs. excavator
Automobiles: Compressing profit margins, trading prices for the market
Upstream auto parts companies in the automotive supply chain have begun to use price increases to ease pressure. In the field of automobile tires, Sumitomo Rubber, Michelin, Goodyear, and other manufacturers have issued a statement about the price increase of about 5%; LiDAR, a startup company in the field of lidar, recently said that the company has received a notice of a 20% -50% price increase ; In the field of automotive electronic components, electronic components such as automotive MCUs have also generally increased prices by 20% to 30%.
Generally speaking, the increase in the price of parts and components will increase the cost of car companies, which in turn will cause the price of cars to increase, but because of the special period of the epidemic, the situation becomes complicated.
However, the price of the car terminal depends on the degree of market recovery. Some organizations predict that 20% of dealers will fall in the next few months, so in order to survive, lowering the price has become a more realistic option. The car price may be further lowered in a short time.
For OEMs, the survival of dealers is related to the overall market layout. The rising costs of parts companies can only be digested by the OEMs themselves-compressing profit margins and replacing the market with prices.
Excavator: press the "price war" pause button to increase profits
In early April, the price increase notices of Chinese construction machinery manufacturers bombed repeatedly, and excavator price increases ranged from 5% to 10%. Pump trucks, bulldozers, forklifts, graders, and road rollers also ushered in price increases. According to a survey conducted by Tiejia.com, some agents said that the price increase of equipment is imperative. Due to the release of demand, even if the price increase is still not available, many brands are facing the status quo that there is no car to mention.
Mining excavation is increased by 10% and Zhongda is increasing by 5%, which is equivalent to the price level in the second half of 2019, which is equivalent to restoring the previous market price, which is conducive to healthy competition in the market.
From the perspective of the excavator manufacturer, ask which one is willing to stay in the abyss of price war for a long time. The price war at the expense of profit or product quality is not a long-term plan. The market needs healthy development, why not find an opportunity to go ashore first? The shortage of upstream accessory parts supply chain just under the epidemic situation provided an opportunity to temporarily break the price war. The head brand went ashore and only this excavator price increase.
Car VS Excavator Future Forecast
Cars: 2020 full-year sales may fall by 22%
With the closure of factories and the isolation of consumers at home, the New Corona virus pandemic continues to cause a major blow to the global automotive industry. IHS Markit lowered its global car sales forecast on Tuesday. It is expected that global car sales will decline by 22% to 70.3 million units in 2020, of which U.S. sales fell 26.6% year-on-year to 12.5 million units.
Colin Couchman, Executive Director of Global Automotive Demand Forecasting at IHS Markit, said: "The unexpected and sudden nature of the epidemic is hitting the automotive industry seriously, and the global recovery prospects are full of unprecedented uncertainties. Interaction with large-scale global supply disruptions due to delayed or cancelled demand , The market prospect is unknown. "
Excavator: April is expected to increase 57% to 77% year-on-year
According to data from the Excavator Association and Iron Armor Fittings, in March 2020, the sales of new excavators and second-hand phones reached 49,000 units and 4.9 to 50,000 units, up 12%, 16% and 19% year-on-year respectively, and the total sales volume was about 9.8 ~ 99,000 units, a year-on-year increase of 14% to 15%. Haitong Securities and Iron Armor are expected to sell 42,000 to 46,000 new mobile phones in April 2020, a year-on-year increase of 48% to 62%. Second-hand mobile phone transaction volume is 48,000 to 55,000, which is expected to increase by 67% to 91% year-on-year. A total of 9.0 to 101,000 units, a year-on-year increase of 57% to 77% is expected.
Automobile VS Excavator User demand
Automobiles: National VI emission and epidemic situation restrain automobile consumption demand
The automobile demand side faces many obstacles. Simply put, there is no money to buy a car.
In fact, in addition to policy subsidies, the proposal to postpone the nationwide implementation of the National Six emission standard has also been raised again. After all, under the epidemic, car consumption in many places was suppressed, which caused A certain impact, and as of January 2020, there are about 260,000 vehicles in the national auto industry's National Five inventory, this pressure is still quite large.
In-depth analysis of IHS Markit's point of view: With the outbreak of the New Coronary Pneumonia epidemic becoming a global epidemic, overseas orders in major manufacturing sectors have decreased significantly, and China is currently preparing for the second shock wave brought by the epidemic. Due to corporate shutdowns and closures, global demand has fallen sharply, which will hinder the rapid recovery of China's manufacturing industry and affect hundreds of thousands of jobs related to international trade. The economic slowdown also makes it difficult for China to maintain steady personal income growth, which is necessary to stimulate consumption of commodities such as automobiles.
Excavator: Exciting infrastructure, strong demand for excavator during the construction period
According to the Haitong-Tiejia start-up prosperity index, the start-up index of engineering equipment has entered a stable stage, and the start-up hours continue to rise, reflecting the demand for hurry. The average working hours of starting equipment reached 7.6 hours, which was higher than the previous month and + 15% compared to the same period in the lunar calendar of 2019. This mainly reflects the strong demand for the construction period after the project started, which is beneficial to the purchase of new equipment. It is expected that the national equipment operating rate in April may rise to more than 80% of the same period in the lunar calendar of 2019. The peak season of construction machinery sales in 2020 has already started and is expected to continue throughout the month of April.
Summary: With the development of the global epidemic, whether it is a car manufacturer with a strong man's broken wrist, a price reduction and survival strategy, or a demand for excavators driven by infrastructure, the construction machinery manufacturers with rising prices will face the shutdown of the global supply chain, Pressure to reduce production and increase prices. Therefore, enhancing domestic substitution of key parts and strengthening manufacturing in China are the effective weapons to deal with the epidemic. Under the epidemic, investment-driven construction machinery manufacturers may have come out of the mud, and automakers with uncertain prospects may need to wait for more good news.
