In 2020, the excavator market is experiencing price fluctuations again. On April 12, a news of Sany excavator price increase quickly became the industry's explosion point, and then the news of XCMG excavator price increase quickly spread among the industry media. The two major domestic construction machinery The excavators of leading enterprises have successively raised prices, which has aroused great concern in the industry, and some companies have quickly followed up, causing a wave of price increases.
Tracing back to the source, what is the reason behind the price increase? Will this be a sign of a general price increase in the excavator market? What impact does it have on the development of the industry? Zeng Xiang, the chief consultant of the elite Zhihui, is invited to make a professional interpretation of the current price increase of excavators to readers.
First review the dynamics of excavator market price increases:
(1) According to the notice of Xugong Excavating Machinery Division on April 10, the price of XCMG excavator small excavation is increased by 10%, and the price of Zhongda excavation is increased by 5%;
(2) According to Sany Heavy Machinery's notice on April 11, Sany Mining increased the price by 10% and Zhongda Excavated by 5%;
(3) The average price increase of Liugong excavators in early April is about 5%;
(4) It is understood that the price of Lovol small digging will also increase by 10%, and the price of Zhongda large digging will increase by 5%;
(5) According to the news of Shandong Lingong Marketing Company on April 14, Shandong Lingong small excavators under 10 tons increased by 20,000 yuan, 10-30 tons excavators increased by 30,000 yuan, and those above 30 tons increased by 50,000 yuan.
(1) Why did the excavator increase its price? Talking about the reasons behind
Reason one: the shortage of upstream supporting parts, the procurement cost increased significantly
Judging from the explanation given by the official price increase notices of manufacturers such as Sany and XCMG, the reasons are the same. The reason for the price increase is mainly affected by the epidemic. The global epidemic prevention and control is still in the stage of tackling. The upstream and downstream of the industrial chain at home and abroad have been affected. With greater impact, the overall cost of production has risen sharply. Under this background, the price increase is also reasonable. After all, from the perspective of the manufacturer, it is necessary to comprehensively consider costs and profits.
Analysis: It is undeniable that the upstream, middle and downstream links are interlocking, the OEM and the supporting parts are stakeholders, and the supply of upstream supporting parts directly affects the manufacturing cost of the midstream host manufacturers. The supply of core components for excavators, including engines and hydraulic parts, is tight. The overseas epidemic caused some external supply shortages, which should be the main incentive.
Reason two: Depressed demand releases and the peak season after the domestic epidemic
Looking back at the domestic excavator market, the demand for the domestic construction machinery industry has increased in the post-epidemic era, and investment in infrastructure construction and municipal engineering has increased. Benefiting from the downstream resumption of production, the demand for the early suppression of the construction machinery epidemic has been fully released, ushering in 2020 The first wave of purchases in 2004.
According to the statistics of China Construction Machinery Industry Association, the total sales volume of excavators in March was 49,408 units, an increase of 11.6% year-on-year, of which 46,610 units were domestic, an increase of 11.2% year-on-year, of which small digs alone took the lead, small digs sold 31,616 units, and medium and large dig sales 12127 and 5665 units respectively; the sales data further confirms that the end-user ’s demand for machine purchases continues to increase, which is also a signal of the arrival of the peak season; the reason why small digging has become the big head, from the perspective of large projects of national infrastructure investment In fact, there has not been a normal start of construction, and the purchase demand of Zhongda Excavation is still relatively low.
Analysis: The big domestic brands led by Sany, XCMG, etc. chose to increase prices at this time node. From the upstream, it is a shortage of supporting parts. From the downstream, it is precisely the release of the market demand mentioned above. For a big brand with a right to speak, this is a good time to take the opportunity to temporarily withdraw from the price war that lasts for a year, and create good market competition.
(2) Transfer costs make up for losses How do industry experts view excavator price increases?
So how should we view the excavator price increase? Will it have an impact on the market pattern? To this end, Tiejia specially invited the elite Zhihui chief consultant Zeng Xiang to analyze the price increase of this excavator from a professional perspective. Teacher Zeng said: "From the perspective of the competition in the entire industry, no matter whether it is a price increase or no price increase this time, the situation of oversupply has not changed. If everyone increases the price together, it will still be oversupply, which is equivalent to the bottom line of price The cost has increased and the overall industry competition pattern will not change substantially due to price increases. All of them will go up or mainstream brands will go up. In the future, they may all come down. "
Who is the leader in price increases? On the surface, it is domestic brands Sany and XCMG. The main reason is that these two are the top two in the domestic market. In comparison, they are relatively influential. The price adjustment is likely to attract attention in the domestic market. In fact, some Foreign brands have already begun to increase prices.
When it comes to how to view the price increase of Sany and XCMG excavators? Teacher Zeng Xiang said: "The price increase of the first excavator can transfer costs and transfer the increased costs on the supply side and the production due to epidemic conditions to the end market; second, since last year, the price of small excavation has been reduced greatly. If the price is reduced Rising up and increasing profits can make up for the loss of sales profits in the previous period to a certain extent. "
(3) Is it rising or not moving? Head brands lead gains, non-first-line brands have difficult decisions
When the news of the price increase of Sany and XCMG excavators broke out, what attracted the most attention was the actions of other brands? Do you choose not to move or follow up? As of April 14, well-known brands in the domestic excavator market, Liugong, Lovol, and Shandong Lingong, also joined the ranks of rising prices. From the analysis of the brands leading the current excavator market, Sany, Xugong, Liugong, and Lingong are domestic head brands. At present, non-head brands are in a wait-and-see state, and they are not eager to adjust the price. For them Whether to rise or not is a difficult multiple choice question.
"Head brands with a strong voice and a strong market share lead the gains, and non-head brands have difficult decisions. Whether the price increase can bring corresponding sales volume is unknown, and whether it can offset the increase in component costs is even more unknown. Under the circumstances, it is difficult for non-head brands to increase their prices or not to affect the market. Without price increases, they will definitely highlight the price-performance ratio, but they may not be fully sure about the increase in sales, and they do not want to lose the opportunity to temporarily reduce cost pressures. " This view.
Why is the head brand going up?
Reason: The head brand has a greater right to speak, not only in the end market, but also in the upstream supply side. If the supply side resources are scarce, it will be given priority to supply large orders, can afford this part of the money, and the payment terms are good Brands, as the upstream supply side, will surely give priority to the supply of head brands, so excavator brands with high head market share are not afraid of price increases.
Why is it difficult for non-first-line brands?
Reason: For non-first-tier brands, it is a difficult choice whether to increase prices next. If you follow up the price increase, the first means that selling in the market is not helpful; the second supply side is also not helped, and the demand in the end market will not change greatly because of your price increase or price reduction. Now the supply side changes. The supply is smaller than the original, and the supply side will give priority to protecting the head brand, so that the right of non-first-line brands to speak on the supply side will be further weakened.
The situation that may occur is that non-head brands may temporarily not increase prices or increase slightly, which will further strengthen the price-performance ratio of non-first-tier brands and will have a small amount of help in sales, but it will not be obvious because of the market Demand will also be suppressed by the price increase, after the price increase, the user brand of the purchase machine attaches more importance to brand influence.
(4) The price returns, the price war has dissipated, and the market needs a virtuous circle
When it comes to excavator prices, of course, the price war is inevitable, especially the price war in 2019 is intensifying. Small excavation is undoubtedly the entry point of the price war, especially 5 tons, 6 tons, 7 tons, 13 tons and other tonnages The price of the excavator in 2019 has dropped significantly. The price war can only be said to be an appearance, but behind it is the battle for market share, the battle between life and death before the reshuffle, and a strong duel of the comprehensive strength of all aspects behind a brand.
In the face of price wars, there are no wins or losses, only harm to both sides. From the perspective of the manufacturer, I would like to ask which one is willing to stay in the abyss of price wars 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.
Teacher Zeng Xiang also mentioned in the interview: "Small digging increased by 10%, and Zhongda digging increased by 5%, which is equivalent to the price level in the second half of 2019, which is equivalent to a recovery of market prices, which is conducive to healthy competition in the market."
The author believes that the price increase of excavators in 2020 is not a bad thing for manufacturers, but also a good thing for the benign development of the excavator market. It is also a good thing for users. Price reduction at the expense of product quality is not What we want to see is that market competition is inevitable, but price-based competition is not a wise move. It is a long-term plan to improve the industry ecology and create a virtuous circle.
Of course, excavator price increase is a signal that the price is gradually returning to rationality. The price cuts have temporarily dissipated. Of course, to end this price war, major manufacturers need to stick to the bottom line. Do n’t let this price increase become a short-term behavior. Don't let the price-cutting winds repeat again and again, only everyone can work together to create a benign market environment.
(V) From the perspective of terminal customers, how do you see the price increase of excavators?
The midstream of the excavator market is interlinked, and the price increase naturally involves a lot. The upstream core components and midstream mainframe manufacturers have already been mentioned above. So, what are the views of downstream end customers in the face of this excavator price increase? On the news of the price increase of Sany and XCMG, the author posted a topic post at the first time in the Iron Armor Forum. The number of post readings quickly exceeded 10,000+, and 80+ industry users expressed their opinions. Finally, I will listen to the opinions of a few friends. .
@ 甲 友 消逝 的 voice:
For the price increase, companies have their own reasons, whether it is an epidemic or industry trends, we have no idea. Perhaps in order to give the market a signal to potential customers to increase prices, prompt customers to buy as soon as possible, or everyone knows the harshness of environmental protection Construction machinery may usher in the country's emissions in the first half or the second half of this year. The higher the emissions, the higher the cost of the production process of the machine itself, so it may also be the basis for price increases, or the rise of raw materials, causing costs For the users, we should still buy. No matter whether the price increases or decreases, our users only hope that the company can make the car seriously and ensure the quality. The market will always survive the fittest. This is also the rule, and the market will become more and more standardized. .
@ 甲 友 为 梦 前 行:
For this price increase, I personally feel that the major manufacturers are the correct way to return to normal competition. This price war has caused many manufacturers to lose production and also created a lot of problematic cars. On the surface, the price is low, but there will be a lot of unnecessary troubles later in the use of the excavator, and the reputation of the manufacturer will be greatly reduced. With this price increase, I hope that the major manufacturers can return to reason, work hard, and make users trustworthy machines and usable machines.
Facing the price increase of this excavator, the author concludes the following 5 main points:
(1) The impact of the epidemic situation at home and abroad, the upstream supply chain is in short supply, costs are increasing, and excavator prices are rising.
(2) The epidemic has shortened the construction period, and the suppressed demand has been released. After the domestic epidemic, the peak season will be welcomed, and the demand for some models will increase.
(3) The head brand leads the rise, the non-head brand has a dilemma, and different brands will have differences.
(4) The price returned to the level of the second half of last year, the price war has dissipated, is it a short-term increase or is it? Need continuous observation.
(5) Terminal customers hope that manufacturers will return to normal competition, and hope that this price increase is not a whim, and that the quality of products is carefully done, and the market is what users want to see most.
