On April 10-11, 2020, XCMG Excavating Machinery Division and Sany Heavy Machinery successively issued notices on the price increase of excavators. Both companies released content that the price of small excavators will be increased by 10%, and the price of medium and large excavators will be increased by 5%. This is after Sany Heavy Industry announced on April 9 that the price of concrete pump truck products will be increased by 5% to 10%, and companies in the industry once again announced a price increase.
This move can be said to be the rise of the domestic excavator leader in the current market. They all said that the price adjustment is mainly due to the impact of the epidemic on the global supply chain system and the practice of "healthy and sustainable" development of the industry And make a decision.
Rising against the trend, can the price war stop?
The price war has become an unavoidable topic in the excavator market, and it continues to exist in the industry, whether it is bright or dark, deep or shallow, but it is only more popular in 2019.
Judging from the price war in 2019, domestic brands are mainly used, and most other brands are in a wait-and-see or "test water" follow-up state, which can be said to be a battle for domestic market share initiated by domestic companies to joint ventures and imports. From the perspective of tonnage, small excavation is undoubtedly the entry point of the price war, especially the price of excavators such as 5 tons, 6 tons, 7 tons and 13 tons has dropped significantly. The low unit price and low technical barriers of small digging are not the major profit margins of many manufacturers. They are mainly reflected in sales figures, which are more used as indicators to seize market share. Therefore, it is not surprising that small digging is the main battlefield for price wars. At present, the leading companies in both industries are bucking the trend of excavator prices, which is a choice made under the dual impact of the price war and the impact of the epidemic on the supply chain. Many people in the industry believe that the leading “turn” of the leading companies may bring a halt to the price war in the industry, thus focusing more on high-quality development. In the short term, the former will have a high probability of realization, while the latter has a long way to go.
Will it cause a wave of price increases?
At the beginning of 2008, there was a collective price increase in the construction machinery industry. The reason is that the cost of raw materials and steel prices continued to increase.
Since March, the global epidemic situation has gradually changed. Except that China has basically contained the new coronary pneumonia epidemic and entered the post-epidemic period, the rest of the world is still in an upward trend, and this trend continues to this day. During this period, many overseas construction machinery host companies and accessory parts companies have announced the closure of some factories. In view of this, Mr. Feng Gang, the co-author of the First Construction Machinery Network, first published the article "Alert! Shortage and Risk of Construction Machinery Supply Chain under the Impact of Overseas Epidemic" on April 7th. The global industrial chain may issue early warnings of the impact of the construction machinery industry, and in particular pointed out that "since mid-March, France, Germany, the United States, Malaysia, Thailand and other countries have successively implemented closure measures, and some factories have ceased production, which may cause The global industrial chain's shutdown situation and whether it will cause the risk of supply disruption are worthy of our vigilance. "At present, the successive price adjustments of industry products are mainly affected by this.
As a leading enterprise in the domestic excavator industry, this problem has been plagued. I believe that other excavator manufacturers have encountered the same problem. The price increase of excavators affected by the epidemic is inevitable, but it is only a matter of time. In addition, the lower and lower price wars have long been the object of "spitting" by industry insiders. Next, the excavator industry may usher in a wave of price increases. It is unfair to simply link the price "ups and downs" to "good or bad". In the global market alone, the price of China's excavators is still high. How can we better integrate into the global excavator industry system in the future And the market system, prices may also be a direction that needs constant adjustment. Therefore, it remains to be seen how the price increase will affect the industry.
Can domestic spare parts be used to overtake?
From another perspective, the current situation is not necessarily an opportunity for the development of domestic accessory parts. It is reported that many host companies have started to look for domestic parts suppliers. First, they hope to cope with the current situation and plug the possible supply chain gap. Second, they are also reflections under the "big test" of the epidemic, hoping to quickly carry out strategic layout , Increase and deepen cooperation with domestic supporting enterprises with strength and potential to reduce future development risks.
For the development of the accessory industry, the cooperation between domestic accessory companies and host companies is no longer a new topic. If the epidemic can accelerate the in-depth advancement of this cooperation, it will undoubtedly be a breakthrough in the core accessory technology of China's construction machinery industry. Good opportunity. For the construction machinery host company, the product is not a simple combination of components, and the degree of optimization and matching between each system determines the quality of the product. Believe this they know better than anyone. In 2011, the "3 ? 11" tsunami in Japan, a domestic rotary drilling rig manufacturer had to choose another international brand because of the temporary out of stock of Kawasaki hydraulic parts, but the quick-start accessories products did not because of its own high-quality product performance. Add points to the host, but product failures occur from time to time. Therefore, even if you find a spare parts partner that can be used for short-term emergency or long-term cooperation, it will take a period of time that will not be too short-term. Through the optimal matching between the various systems of the product to ensure and improve the overall performance and quality of the product, it is more sustainable And long-term development.
Does the user's emotions need to be "pacified"?
Will the users accept the increase in product prices under the epidemic situation?
In fact, the price increase of excavators in the Chinese market is not the first time. As early as around 2007, foreign brands raised prices by an average of about 2.5%. In the era when domestic brands did not dominate the performance and the price advantage was dominant, the price increase of foreign brand excavators did not affect sales. Foreign-branded products have stable performance, low failure rate and low maintenance cost, and high value retention rate. After that, in 2008 and 2012, China's excavator industry has successively carried out several price increases. However, after nearly ten years of development, domestic excavators are no different in terms of market share or product quality. For this price increase, the reporter of First Construction Machinery Network contacted several BOSS group excavator masters for the first time. Most users said that the quality of the current domestic brand excavator has been significantly improved, and there is no need to rely solely on price advantage for competition. The price increase forced by the supply chain is understandable. In addition, since March, the domestic market has rebounded significantly. After the sales surge, the price increase is also expected. Most users are neutral or even not optimistic about the continuity of the domestic leading companies ’first price increase and the impact on sales, but in the current complex market environment, this price increase may not necessarily affect the company ’s market. Occupation has a substantial impact and may even be promoted to some extent. In fact, aside from this price increase, in March, when the monthly sales of excavators in China were close to 50,000 units, the first construction machinery network once increased to nearly 50,000 units in the "revenge" of March excavators, which was very popular. Can the degree continue? "The article stated that in view of the current global supply chain situation, the continuity of this hot degree also needs to be cautiously optimistic.
Don't blindly be pessimistic, act prudently!
Today, the trend of global economic integration is becoming more and more obvious, and the manufacturing integration that covers it is no exception. Previously, Wang Min, Chairman of XCMG and Secretary of the Party Committee, once said, "The current production of construction machinery is already a large globalized and socialized production system. Which nerve ending is faulty, or it is impossible to complete it without a screw. The assembly of large construction machinery products. "Facing the epidemic situation, China has issued a series of policies to help and stimulate economic development. However, even under the favorable domestic economic policies and development environment, the development of construction machinery enterprises and industries should still be prudent. In particular, especially when China's high-end construction machinery products are still highly dependent on imported engines and hydraulic parts, the operation of the global supply chain system poses great challenges to the development of the industry. At present, the tense situation is mainly manifested in the European accessory products, and the Asian epidemic is relatively well controlled. However, as another major import channel for China's construction machinery product accessories, Japan and South Korea, its domestic epidemic prevention and control and enterprise production capacity need special attention. Feng Gang pointed out that the Japanese government has recently issued a notice to recall companies. Komatsu, Hitachi and other companies have also lowered global production capacity, which requires our special attention. Once there is a more tense situation, the situation will be more severe than it is now.
However, the situation is not entirely negative and pessimistic. According to the current global anti-epidemic situation, some countries in Europe such as Italy have shown some stable trends. Feng Gang pointed out that if the industrial chain resumes normal operation around the end of April, the current overseas supply chain The impact on the industry is still relatively limited. If only imported accessories appear, they may face a temporary shortage of 20%.
In any case, whether we are willing or not, the crisis has made us encounter. How to find opportunities in a crisis, break through the limits, think quickly and respond to them is the biggest challenge to the industry, enterprises and everyone.
