How far away is the "double carbon" policy? Many people think it's too early, and it seems that nothing has changed.
In fact, the "double carbon" policy will subvert many industries, including the construction machinery industry I am engaged in. Think about it: what does it mean to us that both the diesel and petrol engines are gone?
At the 75th session of the United Nations General Assembly, China made a solemn commitment to the world: achieve carbon peaking by 2030, so that carbon dioxide emissions will no longer grow, and achieve carbon neutrality by 2060 to complete "zero emissions" of carbon dioxide!
The Eu proposes to reduce greenhouse gas emissions by 55% by 2030 compared to 2021, which means that two-thirds of the new cars sold in the EU will need to be electric vehicles, hybrid vehicles and fuel cell vehicles, while Germany requires that almost all new cars sold in 2030 must be energy-saving and emission-reducing vehicles. By 2035, the European Union will ban the sale of new cars powered by fuel engines and become carbon neutral by 2050.
The impact of "double carbon" on diesel engines and derivatives
On March 19, 1897, the diesel engine developed by the German inventor Rudolf Diesel was successfully tested, and the diesel engine was also named after Diesel, known as Diesel Engine. Since then, diesel engines have gradually replaced steam engines, and one era ends and another begins.
The first diesel engine developed by Rudolf Diesel
Times have changed, and it is time for diesel engines to withdraw from the stage of history! Those that produce diesel engines, no matter how brilliant and successful they once were, are facing transformation, because diesel engines are no longer allowed by the market.
Of course, there are also those enterprises that produce diesel engine derivative products, such as: oil, air filter, diesel filter, machine filter, coolant, etc., these enterprises will change from supporting products for diesel engines to new energy supporting products, otherwise they will be eliminated by the times.
The impact of "double carbon" on dealers and accessory stores
If we analyze the parts business of dealers and accessories stores, we will find that many of the top parts varieties in sales in recent years are related to diesel engines, such as: oil, coolant, antifreeze, diesel filter, machine filter, air filter, etc. As long as the equipment is running, users need to replace these parts and oil products regularly, because they are necessary to ensure the normal operation of diesel engines.
These necessities are even more important for dealers, as the equipment warranty strictly requires users to use genuine parts, oils and coolants, which guarantees about 30% of the dealer's revenue for accessories. Unfortunately, the need for these parts, oils and coolants is about to disappear.
Dealers and accessories stores must be wondering: How can we make up for this part of the lost business? I want to remind you that your biggest risk is not only how to make up for lost sales, but also how to avoid more sluggish inventory losses!
No matter how expensive the diesel parts in the warehouse are, when the diesel engine disappears, these parts will be left unattended! If you are a franchise store for diesel engine accessories, congratulations, the challenges you face will be even more severe, and you are only one step away from bankruptcy.
How to deal with the huge changes in the market?
First of all, control the inventory risk, sort out the parts related to the diesel engine, purchase goods on demand, and change the "logic" of such parts inventory planning.
In the past, the most worrying thing for enterprises was that they were out of stock, unable to meet customer needs, resulting in customer churn, and the money they could make could not be earned. Therefore, enterprises set a high safety stock to ensure that there is no shortage of goods, especially the commonly used diesel engine parts.
In the future, the focus of inventory management will shift to controlling the risk of sluggishness, and safety stocks will be set very low. Due to the reduction in the number of diesel engines, the demand for injectors that were 20 per month last year may drop to 12 per month this year, and if we do not have insight into these changes in market demand, we may generate sluggish inventory.
Therefore, companies need to track the average monthly demand for each part to ensure that when demand changes, parts inventory can be adjusted at any time. The best practice is to use inventory planning software (e.g., Yuke INFORMATION TECHNOLOGY's think tank butler system) to evaluate changes in market demand on a monthly basis, and to do inventory analysis and planning according to changes.
It may take 5 to 10 years for diesel engines to exit the market, which is a process of gradually decreasing demand, and companies must change the original extensive inventory strategy from now on. In the past, there were too many parts to purchase, at most it only caused a backlog, and time could help us correct our mistakes, and after 1 to 2 years, they were sold. In the future, time will not be on our side, and sluggishness means loss.
Secondly, enterprises must look for new opportunities in the new energy era, provide value-added services around the needs of electrification equipment and customer pain points, and obtain new growth engines.
After the withdrawal of diesel power from the historical stage, the demand for power has not disappeared, new energy debuts, intelligent construction, terrain mapping, construction planning, engineering contracting, service agreements, charging services, battery replacement, battery recycling, power replacement, etc., users' demand for services is more diversified, dealers must transform to service providers, to provide users with diversified service solutions.
Many people turn the money they earn into inventory in order to better meet the needs of users and make more money. This business philosophy and model is long outdated, and if it is not changed in time, one day, your spare parts inventory will become a pile of scrap iron.