On April 11-12, 2024, the 21st High-level Forum on Construction Machinery Development of China Construction Machinery Industry Association was held in Jiaxing with the theme of "New Opportunities, New Advantages, and New Actions".
On the morning of the 12th, in the construction machinery parallel forum (2) with the theme of "demand traction - new models, new formats, new initiatives", 14 enterprise leaders from various subdivisions of the industry were divided into two groups around the theme of the meeting, combined with their own practical experience and development strategy, combined with the current complex situation and unprecedented challenges faced by the construction machinery industry, analyzed the new formats and new models of industry development; The exploration and application of new models, strengthening cooperation and technological innovation between enterprises, and promoting the resilience and safety of the industrial chain and supply chain have provided new ideas and directions for the future development of enterprises and the overall progress of the industry.
Parallel Forum (2) Group II
Panelists:
Yang Yihua, Chairman of Maxima Machinery Supply Chain Co., Ltd., Fu Yaosheng, Chairman of Lei Shing Hong Machinery Group, Cao Weiguo, Chairman of Zhejiang Liyang Machinery Co., Ltd., Zhou Chijun, Chairman of Hefei Xiangyuan Construction Machinery Co., Ltd., Yang Chisheng, Chairman of Beijing Hengri Construction Machinery Co., Ltd., Yan Ding, Chairman of Zhejiang Likrypton New Energy Technology Co., Ltd., and Luo Qingqiang, Chairman of Hangzhou Hengjie Construction Machinery Co., Ltd.
Parallel Forum (2) The second group of dialogues
The opening moderator of the forum: Lv Ying, Deputy Secretary-General of China Construction Machinery Industry Association
Forum dialogue moderator: Yang Zhifang, Secretary General of the Agent Working Committee of China Construction Machinery Industry Association
The following is a transcript of the conversation:
Yang Zhifang: Please briefly introduce the basic situation of your respective enterprises.
Cao Weiguo, chairman of Zhejiang Liyang Machinery Co., Ltd
Cao Weiguo: Zhejiang Liyang Machinery Co., Ltd. is the general agent of Volvo construction equipment in Zhejiang and Shanghai, and the general agent of Liugong's full range of machinery in Zhejiang.
Yang Yihua, chairman of Maxima Machinery Supply Chain Co., Ltd
Yang Yihua: Maxima Machinery Supply Chain Co., Ltd. is a construction machinery service provider that provides new energy scenario-based solutions and high-end customization.
Fu Yiusheng, Chairman of Lei Shing Hong Machinery Group
Fu Yiu Sang: Lei Shing Hong Machinery Group acts as an agent for the sale of Caterpillar's full range of products and after-market services, covering East China, North China and Taiwan Province of China.
Zhou Chijun, chairman of Hefei Xiangyuan Construction Machinery Co., Ltd
Zhou Chijun: Hefei Xiangyuan Construction Machinery Co., Ltd. is the agent of Sany Heavy Machinery Excavator in Anhui and Henan provinces.
Yang Chisheng, chairman of Beijing Hengri Construction Machinery Co., Ltd
Yang Chisheng: Beijing Hengri Construction Machinery Co., Ltd. is mainly the agent of Komatsu excavator in Beijing, Tianjin, eastern Inner Mongolia and other regions, as well as the agent of Shantui bulldozer business segment.
Yan Ding, chairman of Zhejiang Likr New Energy Technology Co., Ltd
Yan Ding: Zhejiang Likr New Energy Technology Co., Ltd. is mainly engaged in R&D, design, production and sales of charging piles. The products are mainly used in the field of construction machinery and commercial vehicles.
Luo Qingqiang, chairman of Hangzhou Hengjie Construction Machinery Co., Ltd
Luo Qingqiang: Hangzhou Hengjie Construction Machinery Co., Ltd. is the agent of XCMG excavator in Zhejiang and Beijing-Tianjin-Hebei.
Yang Zhifang: The industry market has entered a downward cycle, please talk about the current market, the survival status and demand changes of end customers.
Fu Yaosheng: Under the current market conditions, Caterpillar's user changes are as follows:
First, the overall operating rate of customers (large digging, medium digging, and small digging) is not very optimistic, and it is worse than the first quarter of 2021, 2022, and 2023.
Second, the client's funds are poor. According to our research, the majority of customers will have a collection rate of less than 50% in 2023.
Third, customers have low confidence in the future and low willingness to purchase.
Customers are generally pessimistic, but customer confidence in some market segments is good, taking mining customers as an example, their equipment operating rates and purchasing intentions are relatively healthy.
Zhou Chijun: The market sales in the first quarter of 2024 will be lower than the same period in 2023. The market has declined more severely than we thought, including volume and sales revenue. From the market level, affected by the adjustment of infrastructure projects, the proportion of medium digging in the past was 30% ~ 40%, and now the proportion of small digging in Anhui Province is 72%, and in the first quarter of 2024, small digging accounts for more than 80% in Henan Province, and medium digging accounts for a little more than 10%. At the same time, in the mining field, the stone mine market is showing a downward trend.
At the user survival level, there are mainly the following changes:
First, because of the low cost of high-end projects and subcontracting, the decline in customer income is beyond imagination, which will bring qualitative changes to the industry. Several foreign brands in China have performed very well in the global market before, why are they not satisfactory after entering the Chinese market? I think it is directly related to the purchasing power of customers, and high-end customers are no longer high-end.
Second, if anything is not an occasional event, consider its long-term ecology. Recently, we have a new argument - 10 years ago, customers earned the difference in project price, in the past 10 years, customers have earned more rental fees, and from 2023 to the present, it is difficult to earn lease fees, because the payment is particularly poor, and the desk fee is particularly low. Look at the automobile industry, because of the promotion of new energy vehicles, the automobile industry has undergone earth-shaking changes, and new energy construction machinery has just begun. Taking the loader as an example, the electric loader can save 300,000 fuel costs after 3,000 hours of work. Therefore, we predict that in the next 10~20 years, customers may have to change from earning lease fees to earning fuel fees, and enjoy the dividends brought by green development.
Yang Chisheng: In Beijing, we have some central enterprises and large customers, which are what we call high-end customers. But now high-end customers are indeed very difficult, from the once billions of deposits to the current billions of loans, which leads to the agent can not pay back in time and even the payment is only an acceptance bill.
Therefore, the current state of customers is: first, only look at the present, not look at the long-term, buy products must be cost-effective, look cheap; second, do not invest, do light assets, equipment leasing or project subcontracting, and strictly carry out risk control; third, do not spend money, buy products before trying out, give priority to the choice of enterprises with good payment terms.
Yan Ding: The customer wants to continuously reduce the cost of use throughout the life cycle. With the increasing popularity of electrification, the cost of using electrified construction machinery is decreasing. As the cost of batteries and cells continues to decline, the proportion of electric loaders will exceed that of fuel loaders in the future. In addition, with the development of mobile charging vehicles and mobile battery swapping vehicles, electric excavators will continue to be popularized.
Yang Zhifang: The industry market has entered a downward cycle, please talk about the changes in the brand manufacturers in the current market from your point of view?
Cao Weiguo: Manufacturing enterprises with different systems may adjust their market strategic objectives or respond to business crises, and based on different business views of right and wrong, domestic and foreign enterprises adopt different response strategies. However, the special attributes of agents determine the high dependence on brand companies (manufacturers), and their market competitiveness and vitality are greatly affected by brand companies (manufacturers).
At the same time, market share is one of the vital signs of manufacturers, and manufacturers need to reasonably adjust the health index of market operation and risk control in order to be more competitive in the long run.
Yang Yihua: The main changes in manufacturers are as follows:
First, the focus on the domestic and foreign markets has shifted, and domestic manufacturers (suppliers) have shifted their attention from the local market to the overseas market.
Second, the sales of domestic manufacturing enterprises in overseas markets have increased year by year, and the sales of some enterprises in overseas markets account for nearly half of the total.
Third, domestic manufacturing enterprises and their agents who are deeply engaged in electrification and intelligent tracks are full of confidence.
Impact on agents and countermeasures:
First, the needs of customers have changed, no longer to meet a single product, agents in addition to providing products also need to provide complete solutions.
Second, the living space of the domestic market is constantly being squeezed, and agents should resonate with manufacturers at the same frequency and aim at overseas markets to find new opportunities.
Luo Qingqiang: We attach importance to the high-quality development of dealers, and manufacturers do not take market share as the only assessment indicator. The current market, including aftermarket and leasing, is highly competitive on all fronts. Manufacturers should empower agents from multiple angles and dimensions, and only in this way can they achieve sustainable development.
Yang Zhifang: In the face of the new needs of users, what new measures should agents prepare to cope with changes?
Fu Yaosheng: At present, the customer's demand has changed from "only one device" to "need a complete solution that can improve operational efficiency", and the agent must focus 100% on the customer's needs if it wants to be sustainable and win the favor of customers and the recognition of manufacturers.
At the same time, agents should think about how to deepen the stock market, how to improve profits through paid services, or selectively carry out operating leases, etc., which can provide certain support for the sustainable development of agents. In addition, agents must learn to use digital tools to empower customers and improve operational efficiency.
It is worth noting that agents and manufacturers need to pay attention to two nodes if they want to obtain higher dividends from the aftermarket: first, whether the manufacturer really regards the aftermarket as a strategy for sustainable development; second, the position of aftermarket service personnel in the industry, whether the agent cares for the maintenance personnel, and whether the manufacturer takes after-sales service as a part of the strategy.
Zhou Chijun: First of all, the manufacturing end to diversify products, this round of market adjustment is mainly the adjustment of infrastructure projects, resulting in the excavator industry is greatly affected, so enterprises should carry out product diversification.
Secondly, the service items are diversified. It is necessary to change from only selling products to multi-format services, such as equipment leasing, equipment modification, operation training, etc. In this regard, we even provide "second-generation services" to high-end customers, that is, to provide medical care, home purchase consultation, credit and other docking services to customers' families. The agent is the first service provider, and the amount and quality of the service content determine the competitiveness.
Third, the industry has developed to a new stage, so high-end customers are no longer high-end, and at the same time, low-end customers are no longer so low-end. Then, for the same product or a service, whether the agent can meet the needs of different customers through multi-level products, it is like having both a five-star hotel and a fast hotel.
In short, it is a diversified product, diversified service, multi-grade service, make full use of digital product tools, and enter the era of full operation and management.
Yang Chisheng: Now, we all have to make a strategic change. In the past, we pursued scale, but now we must pursue efficiency. In the past, agency was thought to be too important, but now we sometimes do subtraction and consider whether you have the ability to do it. So, for the transformation, I think the main ones are the following levels:
First, seek inward, do a good job in management, reduce costs, and strictly control risks. It's good to have a profitability of 2%, so how to reduce risk should start from within.
Second, from the sales of the pre-market to the management of the whole life cycle of the after-market, it is necessary to meet customer needs as the main task, dig out where the customer needs have not been met before, and consider how to meet them in the future.
Third, we need to cooperate internally and externally. In the past, the relationship between peers was a game and competition, but now it is necessary to transform it into a cooperative relationship, strengthen the alliance with all parties, and work together to do a good job in the market and reduce costs. In the past, the company was centered on the boss, and now we want employees to become our partners, and our company now has to discuss every decision and every business development with you, and everyone shares the cake together.
Yan Ding: From the perspective of the whole life cycle use cost of the customer terminal, it can guide the customer to the direction of new energy. The direction of new energy is not only the electrification of equipment, but also the use of new energy, and the supply price of electricity directly determines the cost of use. While providing equipment, agents should also study low-cost energy consumption solutions to provide users with a package of solutions.
Yang Zhifang: In the face of new changes in manufacturers, or in the new manufacturer relationship, how should agents respond?
Cao Weiguo: First of all, the most fundamental business cooperation is to share responsibility and achieve mutual win-win, manufacturers should be equal business cooperation, to achieve a win-win situation for manufacturers, agents and manufacturers need to perform their duties, and jointly create value for customers.
Channels are an indispensable part of a brand's strategic goals and customer service in the market. Manufacturers should establish the ability to manage and cultivate channels to meet the brand's requirements for channels, and establish a win-win mechanism on the premise of meeting customer needs. Similarly, agents should be able to fulfill the responsibilities assigned by the brand company (market share, risk management, customer satisfaction), provide customers with more valuable products and services, and cooperate with manufacturers to achieve a win-win situation. Caterpillar's vendor relationships are worth analyzing and studying.
Yang Yihua: The relationship between manufacturers is dynamic, and manufacturers and agents have different capabilities. Whether it is a manufacturer or an agent, diversification can be sustainable.
Luo Qingqiang: We have always adhered to the agency system unswervingly, and the relationship between dealers and factories pays attention to the same values and coordinated operations. First of all, it is a long-term strategic partnership, to jointly plan the market, and secondly, we participate in risk management with manufacturers, reasonably share market risks, and ensure business stability and sustainability.
Yang Zhifang: What is the new quality productivity of agents, what are the specific models? What are the new breakthroughs in the cultivation and development of after-market business by agents, and how can agents cultivate this ability?
Cao Weiguo: Agents should be deeply involved in the after-market operation. Taking Zhejiang Liyang as an example, the aftermarket of agents has expanded from traditional services, maintenance and accessories to a total of 12 aftermarket operations under the premise of "meeting customer satisfaction". Among them, general accessories, special applications and attachment modifications are promising.
Agents do after-market operation is a long-term accumulation, which requires corresponding capabilities and long-term investment, including the assessment of technical personnel's ability, after-market business system, workshop, cost control, quality control, etc.
Yang Chisheng: We are the agent of Komatsu excavator, although the product has a certain market stock, but in fact, our aftermarket business is also very good. For example, when the market is particularly bad, Komatsu products alone may not sell one or two units a month, but we have income in terms of spare parts, services, overseas business, etc., so we have good support.
So, I think, the aftermarket is a strategy. We may not be an agent in the standard sense in the future, but a waiter, a strategic operator, especially after Chat GPT comes out, in addition to providing good services, it is also a starting point, an important means of competition, and the core competitiveness. So, how to do a good job of service transformation?
First of all, this is a "number one" project, and the chairman has to personally grasp it. For example, "good opportunities" means that we take the initiative to find ways to actively change from many models, and carry out resource allocation, organizational reengineering, capability reengineering, business model reengineering, etc.
Secondly, the improvement of comprehensive service capabilities and the construction of cross-industry service capabilities. We talk about "successful companion, worry-free housekeeper", and equipment management is not a simple matter, especially in overseas markets. The best service we provide is to ensure that the equipment does not break, not to repair it quickly.
Thirdly, to reduce the cost of services, including through capacity-building and the use of different tools.
Fourth, services are more refined, such as inventory management, personnel management, business management, etc.
Fifth, provide value-added services, rather than free services, services are core competitiveness, and the ability to make money through services should be strengthened.
Yang Zhifang: How do you build the digital capabilities of agents?
Luo Qingqiang: First, the interface is faster and more friendly to the external and customer interface, which improves efficiency. Customers can apply for repairs and accessories on their mobile phones, and at the same time, through new interactive methods such as live broadcast and video, they can better adapt to the needs of young customers. Second, use digital tools internally to train business personnel on products and empower sales.
Yang Zhifang: Aftermarket services are very important to agents, and digitalization is a key element of them.
Fu Yaosheng: Digital construction requires continuous investment in capital, technology, and talents, and the construction of digital capabilities of agents must improve efficiency. The digital tools currently used by agents are mostly derived from the investment and support of factories, and agents can flexibly use the management system and short video live broadcast platform to increase interaction with customers and improve communication efficiency. At the same time, the flexible use of digital management tools can greatly improve the efficiency between departments and make information communication more transparent and smooth.
Yang Zhifang: New energy is a new track, but also the embodiment of new kinetic energy, you have some new landing and attempts in the agent of new energy products, what are the good suggestions can be shared with you?
Zhou Chijun: The electrification of construction machinery is the theme of recent years, but the construction machinery industry has taken the old road of the automobile industry more than ten years ago, and what we lack is the underlying innovation. Electrified products can be said to have entered a bottleneck period. The industry standard for construction machinery is 8-hour shift system and 10-hour shift system, but the long-range version of the electric loader is up to 6 hours, so the customer is very painful. To this end, starting in 2023, we have been promoting a high-density half-range mode.
In short, on the track of new energy, we pay more attention to the underlying innovation and customer thinking, so that customers can use it more conveniently, economically and reliably. As far as I know, there are already six or seven agents trying to do this, and we hope to do more discussions with you and contribute the wisdom of agents.
Yan Ding: What we want to do is not only sales, operation and maintenance, leasing, but also to provide a package of new energy solutions, including charging stations, photovoltaics, new energy power plants, energy storage stations, etc. Power supply and electric equipment, the two coexist, and in the case of both, it will bring unexpected surprises to everyone.
Yang Zhifang: Internationalization is a hot word, if the agent wants to explore whether it is feasible on the road to internationalization, what kind of ability should it have?
Yang Yihua: First of all, to have talents, the risk of overseas markets is high, agents must have trustworthy, foreign work experience of talents available; secondly, to have reliable partners, agents can take root in overseas markets for a long time; finally, to have a good model or product, agents to study the target market in advance, to find a differentiated product to generate profits.
Yang Zhifang: Please use simple keywords to describe the key points for the development of the entire industry or agent group in 2024.
Cao Weiguo: Personally, I feel that agents should at least be prepared and respond to the continuous downturn for more than 5 years.
Fu Yaosheng: Alive, I once again call on the agents to be unswervingly alive, and the agents will inevitably bring a great boost to the success of the manufacturer's brand in different fields. Therefore, I also hope that manufacturers in the cycle adjustment should think reasonably about how to make the agent the most important success factor, so that the agent can become a real partner.
Zhou Chijun: It's April 2024, and the industry has been in this cycle for three years, and it's not the lowest but also nearing the end. Therefore, in 2024, especially agents, including manufacturers, I hope that everyone can be steady, take positive actions, and face the future.
Yang Chisheng: Adhere to long-termism, learn to adapt in the predicament, and strive to be reborn in the fire.
Yang Yihua: Agents must require change.
Yan Ding: Embrace electrification.
Luo Qingqiang: First, pay more attention to market segments, second, accelerate digital transformation, third, strengthen risk management, and fourth, strengthen talent training.
Zhuozhong construction machinery media organization
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