It is certainly a clever move to take advantage of a good situation and make great achievements. However, it is even more remarkable that, in the midst of disappointment and trough, you can still see and even create hope and persevere.
In the face of the flat and slightly pessimistic attitude that the industry has recently held in China's excavator industry, Li Hongbao, Secretary General of the China Construction Machinery Industry Association Mining Machinery Branch, should be able to bring the industry’s expectations and prospects for the development of the Chinese excavation machinery industry. "Flood and Flower Village" is suddenly clear.
Li Hongbao believes that in the next few years, China's excavator industry will undergo major changes. Whether the relevant companies can seize the opportunity and expand the fruits of victory in this period of transformation and upgrading depends on whether they can timely sense or adapt to these changes.
The first change: The two most important links in the value chain to expand products from manufacturing to service are production and sales. Communication is the service.
Since 2011, the situation of gradually slimmer machine profits and slowing of new demand has become very obvious. The market competition for excavating machinery will achieve two transformations. First, the transition from product manufacturing competition to value chain competition, and second, from the value chain. The assembly manufacturing sector is shifting to service areas such as financial leasing, remanufacturing, parts supply, maintenance, used equipment sales, and logistics. Based on this, one of the directions for the upgrading of the machinery industry is to realize the redistribution of the value chain, and the focus of profits will be shifted from traditional manufacturing profits to service profits. Currently, about 50% of sales in developed countries in Europe and America are realized through financial leasing. Financial leasing has become the most important means for manufacturers to increase their market competitiveness, and it is also a new profit growth point in the industrial value chain.
This requires excavator production companies to change the "selling" of the inherent thinking, from a new point of view to define the product's service and sales links, in order to create new value.
The second change: The increasingly high-end products Li Hongbao, who has considerable research in the construction machinery industry in other countries, told reporters that from the experience of the upgrading of the Japanese construction machinery industry, excavating high-end mechanical products is one of the major development directions in the future.
Faced with a series of unfavorable factors such as the oil crisis, rising costs, and appreciation of the local currency, Japan has actively developed high value-added products such as hydraulic excavators and gradually reduced the proportion of low-value-added products such as bulldozers and loaders. Take bulldozers, hydraulic excavators and loaders as an example. Japan’s high-margin hydraulic excavator shipments accounted for 38.2% of sales in 1971 to 68.20% in 1977. Low-value bulldozers and loaders, respectively, were used. From 31.54% and 36.92% to 17.81% and 13.99%. At the same time, the export product structure of the country has been continuously optimized. The export of high value-added products such as hydraulic excavators has grown rapidly, while the products with low marginal benefits have declined more significantly.
The third change: The imperative of localization of key components must be recognized. At present, the core technology of China's excavation machinery industry is still in the hands of foreign suppliers, which undoubtedly reduces the competitiveness of domestic brand excavators.
Changing this phenomenon is not a matter of overnight. In the long-term, it is necessary to establish a sound component R&D, production, manufacturing, testing, and supply system. The host company should increase its support for the parts and components companies, and at the same time, vigorously cultivate technical skills. Talented people, innovate vigorously in production, cultivate their own characteristics, “localization of key components†is the direction in which China excavates the joint efforts and struggle of the machinery industry.
Fourth change: The trend of internationalization is becoming increasingly apparent In the internationalization trend of China's construction machinery industry, there are three major performances that should attract attention.
Performance 1: Excavating machinery industry will become the vanguard of the internationalization strategy of construction machinery industry. The strategic layout of China's high-end equipment manufacturing industry has already begun. The construction machinery industry will take the lead in layout. Excavators will become the world’s leading players in this wave of internationalization, which will change the global competition landscape of the Chinese digging machine industry. Of course, this depends on the progress of the internationalization strategy of Chinese excavator mainframe manufacturing companies. From the overall perspective, the internationalization of domestic leading enterprises will continue to be explored.
Performance 2: Product optimization, export expansion will become a new force for future industry development. In the case of falling profits of low-end products, product structure optimization will increase the proportion of high-end product exports and enhance export competitiveness. For high value-added products such as excavators, although relatively high export prices, most foreign export markets are now occupied by foreign brands. Therefore, increasing the proportion of local high-end product exports will effectively increase the export earnings of Chinese construction machinery. Level, enhance export competitiveness. Export expansion will also greatly expand the sales space for Chinese excavation machinery.
Performance 3: Localized production to supply the world is the ideal development model for China's mining machinery industry. Global supply not only enables a significant increase in the proportion of export revenue, but also the progress of globalization will be pushed forward. According to the background and experience of Japan’s global development of construction machinery, the appreciation of the yen, trade friction, and rising costs are the direct trigger points, while the vast market demand overseas is the most fundamental driving force. History is so similar that these factors are exactly the direct or indirect driving force for China to explore the globalization of the machinery industry.
Fifth change: The industry's low-carbon era is approaching The industrial upgrading of excavating machinery will benefit from the development of the new economy and low-carbon economy. According to the “Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries,†the next 10 years will focus on the development of seven strategic emerging industries, including the energy-saving, environmental protection, new-generation information technology, biology, and high-end equipment manufacturing industries as national economies. Pillar industry.
By 2015, the strategic emerging industries will form a basic pattern of healthy development and coordinated advancement. The promotion of industrial structure upgrade will be significantly enhanced. The ratio of added value to GDP will reach around 8%. By 2020, strategic growth will occur. The ratio of industrial added value to gross domestic product is about 15% of that of gravity. Li Hongbao believes that in the new economic era, low-carbon environmental protection and energy-saving technologies will be widely used in the excavation machinery industry, and the entire excavation machinery manufacturing industry is expected to be the first to upgrade.
Sixth change: The western region will become the deepest urbanization of growth, investment is the precursor of consumption, and the excavation machinery industry as a construction machinery equipment manufacturing industry will benefit greatly. The "Twelfth Five-Year Plan" puts forward: "To promote coordinated regional development and to actively and steadily promote urbanization."
The impact of western development on excavating machinery in 2010 exceeded expectations, and investments in western provinces such as Inner Mongolia, Xinjiang, and Sichuan contributed greatly to the demand for equipment. These provinces have become a major province for excavating machinery. Infrastructure construction such as high-speed rail is accelerating, and the urbanization process driven by this is also accelerating. Of course, with the continuous development of the western region, there will be new breakthroughs in the future development of the excavation machinery market.
In the face of the flat and slightly pessimistic attitude that the industry has recently held in China's excavator industry, Li Hongbao, Secretary General of the China Construction Machinery Industry Association Mining Machinery Branch, should be able to bring the industry’s expectations and prospects for the development of the Chinese excavation machinery industry. "Flood and Flower Village" is suddenly clear.
Li Hongbao believes that in the next few years, China's excavator industry will undergo major changes. Whether the relevant companies can seize the opportunity and expand the fruits of victory in this period of transformation and upgrading depends on whether they can timely sense or adapt to these changes.
The first change: The two most important links in the value chain to expand products from manufacturing to service are production and sales. Communication is the service.
Since 2011, the situation of gradually slimmer machine profits and slowing of new demand has become very obvious. The market competition for excavating machinery will achieve two transformations. First, the transition from product manufacturing competition to value chain competition, and second, from the value chain. The assembly manufacturing sector is shifting to service areas such as financial leasing, remanufacturing, parts supply, maintenance, used equipment sales, and logistics. Based on this, one of the directions for the upgrading of the machinery industry is to realize the redistribution of the value chain, and the focus of profits will be shifted from traditional manufacturing profits to service profits. Currently, about 50% of sales in developed countries in Europe and America are realized through financial leasing. Financial leasing has become the most important means for manufacturers to increase their market competitiveness, and it is also a new profit growth point in the industrial value chain.
This requires excavator production companies to change the "selling" of the inherent thinking, from a new point of view to define the product's service and sales links, in order to create new value.
The second change: The increasingly high-end products Li Hongbao, who has considerable research in the construction machinery industry in other countries, told reporters that from the experience of the upgrading of the Japanese construction machinery industry, excavating high-end mechanical products is one of the major development directions in the future.
Faced with a series of unfavorable factors such as the oil crisis, rising costs, and appreciation of the local currency, Japan has actively developed high value-added products such as hydraulic excavators and gradually reduced the proportion of low-value-added products such as bulldozers and loaders. Take bulldozers, hydraulic excavators and loaders as an example. Japan’s high-margin hydraulic excavator shipments accounted for 38.2% of sales in 1971 to 68.20% in 1977. Low-value bulldozers and loaders, respectively, were used. From 31.54% and 36.92% to 17.81% and 13.99%. At the same time, the export product structure of the country has been continuously optimized. The export of high value-added products such as hydraulic excavators has grown rapidly, while the products with low marginal benefits have declined more significantly.
The third change: The imperative of localization of key components must be recognized. At present, the core technology of China's excavation machinery industry is still in the hands of foreign suppliers, which undoubtedly reduces the competitiveness of domestic brand excavators.
Changing this phenomenon is not a matter of overnight. In the long-term, it is necessary to establish a sound component R&D, production, manufacturing, testing, and supply system. The host company should increase its support for the parts and components companies, and at the same time, vigorously cultivate technical skills. Talented people, innovate vigorously in production, cultivate their own characteristics, “localization of key components†is the direction in which China excavates the joint efforts and struggle of the machinery industry.
Fourth change: The trend of internationalization is becoming increasingly apparent In the internationalization trend of China's construction machinery industry, there are three major performances that should attract attention.
Performance 1: Excavating machinery industry will become the vanguard of the internationalization strategy of construction machinery industry. The strategic layout of China's high-end equipment manufacturing industry has already begun. The construction machinery industry will take the lead in layout. Excavators will become the world’s leading players in this wave of internationalization, which will change the global competition landscape of the Chinese digging machine industry. Of course, this depends on the progress of the internationalization strategy of Chinese excavator mainframe manufacturing companies. From the overall perspective, the internationalization of domestic leading enterprises will continue to be explored.
Performance 2: Product optimization, export expansion will become a new force for future industry development. In the case of falling profits of low-end products, product structure optimization will increase the proportion of high-end product exports and enhance export competitiveness. For high value-added products such as excavators, although relatively high export prices, most foreign export markets are now occupied by foreign brands. Therefore, increasing the proportion of local high-end product exports will effectively increase the export earnings of Chinese construction machinery. Level, enhance export competitiveness. Export expansion will also greatly expand the sales space for Chinese excavation machinery.
Performance 3: Localized production to supply the world is the ideal development model for China's mining machinery industry. Global supply not only enables a significant increase in the proportion of export revenue, but also the progress of globalization will be pushed forward. According to the background and experience of Japan’s global development of construction machinery, the appreciation of the yen, trade friction, and rising costs are the direct trigger points, while the vast market demand overseas is the most fundamental driving force. History is so similar that these factors are exactly the direct or indirect driving force for China to explore the globalization of the machinery industry.
Fifth change: The industry's low-carbon era is approaching The industrial upgrading of excavating machinery will benefit from the development of the new economy and low-carbon economy. According to the “Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries,†the next 10 years will focus on the development of seven strategic emerging industries, including the energy-saving, environmental protection, new-generation information technology, biology, and high-end equipment manufacturing industries as national economies. Pillar industry.
By 2015, the strategic emerging industries will form a basic pattern of healthy development and coordinated advancement. The promotion of industrial structure upgrade will be significantly enhanced. The ratio of added value to GDP will reach around 8%. By 2020, strategic growth will occur. The ratio of industrial added value to gross domestic product is about 15% of that of gravity. Li Hongbao believes that in the new economic era, low-carbon environmental protection and energy-saving technologies will be widely used in the excavation machinery industry, and the entire excavation machinery manufacturing industry is expected to be the first to upgrade.
Sixth change: The western region will become the deepest urbanization of growth, investment is the precursor of consumption, and the excavation machinery industry as a construction machinery equipment manufacturing industry will benefit greatly. The "Twelfth Five-Year Plan" puts forward: "To promote coordinated regional development and to actively and steadily promote urbanization."
The impact of western development on excavating machinery in 2010 exceeded expectations, and investments in western provinces such as Inner Mongolia, Xinjiang, and Sichuan contributed greatly to the demand for equipment. These provinces have become a major province for excavating machinery. Infrastructure construction such as high-speed rail is accelerating, and the urbanization process driven by this is also accelerating. Of course, with the continuous development of the western region, there will be new breakthroughs in the future development of the excavation machinery market.
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