On August 23, 2022, Ren Zhengfei, the founder of Huawei, made a speech entitled "The business policy of the whole company should shift from pursuing scale to pursuing profits and cash flow", which was circulated on the Internet. This is his sixth "cold winter theory". It has been more than 20 years since the famous "Huawei Winter" in March 2001.
Ren Zhengfei said in the article: The next ten years should be very painful. The global economy will continue to decline, and it is unlikely to improve in the next three to five years. No region in the world is a bright spot. Huawei should change its thinking and operating policy from pursuing scale to pursuing profit and cash flow to ensure that it can survive the crisis in the next three years. "Take survival as the most important program, shrink and close all marginal businesses, and pass the chill on to everyone." Ren Zhengfei's words immediately spread all over the network.
Ren Zhengfei once issued the "Cold Winter Theory" five times in 2001, 2004, 2008, 2012 and 2016, reminding Huawei to pay attention to risk prevention. The first five times when the economy was basically in a rising period, Ren Zhengfei's warning caused fluctuations in the stock market. Over the years, Huawei has been able to develop tenaciously under the pressure of the United States, which has a lot to do with Ren Zhengfei's crisis awareness.
Seeing this, I have a question: the construction machinery industry has experienced several major market adjustments, and the cold winter has arrived. Why did no one issue a similar warning first? On the contrary, what we heard were optimistic predictions about the industry. Why did the industry not have "cold winter theory" and "Ren Zhengfei"?
At the end of last year, the industry's downward trend has been very obvious, and the cold weather is threatening. However, some experts are still confident that the industry can achieve 7% growth in 2022. Before 2011, some leaders and experts even said that they would achieve 13% growth in the next year. Are we too optimistic? Is the expert level not high? Or dare not tell the truth, for fear that the industry will fail and cannot bear the responsibility for the decline of the stock market?
Over the years, China's construction machinery market has been growing rapidly, and many people have taken high-speed growth as normal. They are too optimistic about increasing production capacity. How much waste has been caused by repeated capacity expansion and capacity reduction, and round after round of recruitment and massive layoffs? Who assessed the losses?
If some experts or leaders, like Ren Zhengfei, dare to tell the truth in the downward cycle of the market and remind enterprises to guard against various risks, there would not be so many agents leaving the market a few years ago, and today's industry might not repeat the tragedy of a few years ago.
This crisis is more harmful than before. It not only affects the whole machine sales market, but also affects the service and parts sales in the aftermarket. As long as you go to the parts markets in various provinces, you can feel the chill of winter. Agents and accessory stores are not only short of cash flow, but also lack of profits. The situation is very serious.
We must have a clear insight into the changes in the market. The faster the market grows, the greater the decline in the future. In the face of the fast growing market, enterprises only feel excited and impulsive, but no one is prepared for danger in peace. They realize that rapid growth will also be accompanied by rapid decline, posing greater challenges to enterprise risk management.
When enterprises are used to the rapid growth of the market, growth thinking may constrain people's thinking mode, and it is easy to be at a loss in the face of a downturn. From today on, we need to change our thinking mode from an upturn to a downturn, because the market will not improve in the next three to five years. Only by working hard to survive and focusing on cash flow and the post market can we help enterprises overcome difficulties. Otherwise, the fluctuation of the market will make a large number of manufacturers and agents fall before dawn.
