The 2021 China Construction machinery marketing & Post Market Conference officially kicked off on November 29. This conference gathered highly influential people in China's construction machinery industry, built a high-level communication platform, focused on "adhering to axiom", discussed many opportunities and challenges in the process of adhering to it, and contributed valuable and knowledgeable wonderful exchanges, in-depth collisions and solutions, Together with my colleagues, I will observe the current situation and look forward to the future.
With China's construction machinery market entering the stock market, post market service value creation has become the focus of attention. How can all parties in the industrial chain build a service value coordinate system and accelerate the reform of post market service mode of construction machinery? The summit forum of "building service value coordinate system" was held at the construction machinery marketing & Post Market Conference.
The summit dialogue was chaired by LV Hua, chairman of Guangzhou Juhe Construction Machinery Co., Ltd. the guests were Fei Chunjiang, head of the business department of Komatsu (China) Investment Co., Ltd. (online), Chang Yudong, deputy general manager and service director of the marketing company of Shandong Lingong Construction Machinery Co., Ltd., deputy general manager of the marketing company of Xuzhou XCMG Mining Machinery Co., Ltd Li Jinwu, general manager of spare parts company, Xi Jun, general manager of Sichuan Zhumao Construction Machinery Co., Ltd., and Yang Huijie, chairman of Hunan weilide Technology Co., Ltd.
2021 China Construction machinery marketing & Post Market Conference
"Summit dialogue" part I market evolution
In the first theme "market evolution" of the summit dialogue, as representatives of main engine manufacturers, agents and technical service providers, several guests focused on the impact of the stock market on the future evolution and challenges of construction machinery service ecology.
LV Hua: as you all know, history is coming again as promised. When we enter the late autumn and winter, this market is already an era of stock, and our customers' needs are changing with their business environment and their age structure. So I want to say, at this time, do our customers need low price of products, or all-round and life-cycle value volume, zero down payment, low down payment or your deep understanding and insight? What else does he need? Today we have invited distinguished guests from manufacturers, agents, parts manufacturers and service platform professionals.
As we all know, in various fields, we are building our own service coordinate system and are carrying out a change in the business model of service in all directions. Today, we invite guests to discuss "building a service value coordinate system". At present, the social ownership of the main products in China's construction machinery market exceeds 10 million and the excavator is close to 3 million. Meanwhile, in recent years, the market continues to grow year-on-year, and the stock market continues to expand cumulatively, which has promoted the sharp increase in the demand for services in the stock market. Distinguished guests, what changes will be made in the service ecology of construction machinery under this background? What new challenges will there be?
Fei Chunjiang: good host, friends attending the meeting, good afternoon! I am very sorry that due to the epidemic situation in Shanghai, I can only participate in this dialogue through Internet connection. As we know, construction machinery is a strong cycle industry. Last year, the sales of new excavators in China exceeded 300000, which has become a phased head. Today is the last day of November. The overall sales situation of excavators in China throughout the year is basically clear. Although it is only a slight decline compared with last year, it is high in the first three months and low in the last three months. In the first three months, it has increased significantly, It will drop sharply after April, and then the downward trend of the market is obvious, and the duration will be relatively long. In the past few years, the demand for complete machines has increased greatly and the sales are booming. Our agents have obtained good profits through the sales of new machines. However, the current situation is that the price is low and the quantity is tight, and the loss area of construction machinery is expanding. It should be that more than half of the agents will suffer operating losses this year. The current dilemma for excavator agents is the survival defense war. Because the demand for new machines is not strong, it is urgent to improve the absorption rate of the whole operation and realize benign operation by expanding the business volume of the market.
Chang Yudong: you may feel more about the changes in the market than I do. There is a great correlation between the ecological changes in services and the overall changes in the market. We know that China's construction machinery industry has experienced a long growth from 1996 to 2012. Until 2012, the survival and profits of our agents were very good. However, from 2012 to the second half of 2016, the market demand for construction machinery decreased sharply in these five years, and our agents also faced great difficulties. Through the growth in recent years, from the second half of 2016 to today, we also have five years of rapid growth. The rapid growth during this period has greatly changed our service ecology. At the beginning of 2000, we sold thousands of machines at most, and our customers were few. Now we sell tens of thousands of machines every year. Our sharp increase is a great consideration for our service. This is a quantitative change.
Let's look at the changes in price. Our agents here are sales agents mainly based on mainframe. Our understanding and feeling of price is very profound. Before 2000, each agent had huge profits, and each excavator and loader had huge profits. Until 2012, although the annual market volume was increasing, However, our price is getting lower, and our profit is also getting lower. The first wave of profit growth is also an obvious trend. We feel deeper in 2019. We haven't felt much in the first half of the year. By the second half of 2019, our small excavators won't make money, and the whole profit has become zero or even negative. By 2020, the profit of the whole small and medium-sized excavators will be basically zero, This year, our prices have also dropped very fast, and the market environment has further deteriorated. Many agent bosses said that I don't make money in the front market. Can I make money in the back market? It's difficult, but it's not impossible. At present, many agents, especially foreign brand agents, have much higher absorption data than our domestic brands. The absorption rate of domestic brand agents is about 20% to 30%. The absorption rate of some foreign brands, including Komatsu and caterpillar, is very high, It shows that the value of our post market has always existed, but the mode of our service and the operation mode of the whole post market may have a big change. How to change needs us to grasp the law and discuss it carefully.
LV Hua: President Chang and President Fei, as two leaders of the main engine factory, explained the difficulties and changes we encountered. Next, we asked the agent representative to tell you about the changes and challenges in the post market ecology?
Xi Jun: our housing and trade system cooperates with Komatsu in the world. We are a subsidiary of the housing and trade system. Our coverage in the United States and Canada can reach more than 15%. Even in Southeast Asian countries, our penetration rate is very high. From the real point of view of our current service value, each of our agents wants to achieve sales in the past two years. In the process of sales, many agents regard service as "the best service wins sales". Your purpose is to win sales. You don't really cultivate your service team and tap the service potential of your customers, So as to create value. If you have no value in service, you can't finally make profits in the post market. How we strive to create maximum value in the post market is what we need to think about in the market downturn in the next few years.
