In April 2023, the author published an article entitled "Confused and not lost" in the magazine "Today's Construction Machinery", a year has passed, many friends are still anxious, confused and confused, today the author hopes that through this article, the majority of industry colleagues in the current more severe market environment, not confused, find the right direction, reduce anxiety. I can't make people feel anxious.
Here I would like to borrow Mr. Yi Zhongtian's three sentences to express the current situation and future of the construction machinery market:
"The status quo is indescribable, the future cannot be predicted, anything is possible."
/// CONSTRUCTION MACHINERY
Today's construction machinery columnist Sun Changxin
Photography: Lin Zhennan
This article is about 3200 words, and the reading time is about 6 minutes
01
The status quo is indescribable
Although it is said that "the status quo cannot be described", it cannot be turned a blind eye, and it cannot be laid flat, at least the brain cannot be flattened. The current situation of China's domestic construction machinery market, especially the core of the current situation of the agent group in the circulation field is confusion and anxiety.
Ten years ago, in July 2014, the author once filled in a poem "Qinyuan Spring" according to the gourd painting to describe the scene of the construction machinery industry at that time:
engineering scene,
Thousands of stoppages,
10,000 arrears,
Looking inside and outside the Great Wall, the prospect is boundless;
The industry is stumbling.
Installed excavator, original Chi King Kong,
I want to be higher than the heavenly test.
In the spring, look at the red and yellow wraps, which is very lively.
The future is so bright,
Led countless agents to bend their waists,
Pity the huge car, a little layman;
Jifeng agricultural machinery, slightly worse,
The five grains are fragrant, and the Pushes are not good.
A generation of bigwigs,
No matter who it is,
You can only shrink to protect yourself.
Danger is not in place,
A number of romantic figures,
Look who's alive!
Through the author's record 10 years ago, it will be found that the industry downturn ten years ago was more serious than this time, or that the industry downturn this time was not as serious as last time, and it was much better than the last time in some aspects, such as manufacturers.
In fact, to this day, especially after one or two rounds of China's construction machinery industry cycle colleagues, not necessarily confused, more anxiety as confused, just want to hope or rely on the market, manufacturers and other external factors to improve or even change.
We know very well in our hearts and know what to do, but it is best for others to give us a clear advice on how to operate, because many things are in a dilemma and painful. For example: what if the market is good if it doesn't dry? What should I do if my salary is cut and my employees are slacking off? What am I doing when I'm closed? Layoffs, so many brothers lay off whom? Is it better to lay off employees or take a pay cut?
The author can't give you an accurate answer, because the situation of each business is very different. But the author can guide everyone to think, think along the right logic, and find out the answer for yourself.
When there are two difficulties, we must be calm, and we must be bold in all difficulties.
Do you have insomnia, panic, sweating, and frequent urinations at the thought of work? If these symptoms do not appear, your anxiety is not severe, it has not reached the most difficult time, it has not reached the point of despair.
Starting in 2023, most manufacturers are not confused or particularly anxious. Our small and medium-sized enterprises, which are mainly agents, dealers, repair shops, and second-hand car dealers, are prone to fall into an anxious situation due to the lack of strategic thinking and pulling the car without looking up at the road.
Anxiety is a lack of execution. Many of your ideas for change are not implemented, the ideal is very plump, and the reality is very skinny. In fact, leadership is execution, and insufficient execution is to a large extent insufficient leadership. In addition to the strategic planning ability, the benchmark enterprises in our industry, Sany Heavy Industry and Weichai Power, the most important thing is the strategic execution, and the things and decisions that are seen are resolutely implemented, so they can achieve good results in growth in the same market environment. Most of us companies and bosses can think of ways to deal with it, but we can't. The farthest distance in the world is the distance between "thinking" and "doing".
What is the difference between the decline of the domestic market in the current round of construction machinery industry and the last cycle? One of the most important differences is that due to the significant growth in exports, manufacturers have a better life than agents; In addition, due to the improvement of the domestic credit system and credit environment, the number of extremely bad customers has decreased.
02
The future cannot be predicted
"The future cannot be predicted", but it can be prepared, and the trend of the cycle is eternal. The more difficult it is, the more important it is to understand the cycle.
Figure 1 The trend of sales volume in the domestic excavator market since 2000
Figure 1 is the domestic market excavator sales as the representative of China's construction machinery industry, 2000 to the present, we found that there is a very typical cyclical behind, see these, the context is very clear, the direction is clear, we should not be confused.
At the end of 2023, a friend asked me: I plan to lay off employees, how long do you think this decline will last before it ends? My answer is: since decisive measures were not taken earlier, it is recommended to wait until the market situation in March-May 2024, and if the market still declines in May, it is estimated that this decline cycle should end in July 2025 or July 2026. This is in line with the practical experience of "eight or nine are not separated from ten" in the figure above.
On May 31, 2021, Sany Heavy Industry said four words to Mr. Wenbo: going overseas, digital transformation, employing people, and being prepared for danger in times of peace. In fact, this is also a way for industry colleagues and enterprises to respond to the downward cycle.
03
What to do?
To gain insight into the real changes in the market, we must do "four looks": look at the trend, look at the customer, look at the opponent, and look at ourselves. One of the most important is "seeing yourself".
Looking at the trend, will the construction machinery industry disappear in the future? No, it's a very long-term industry and we're going to be around for the rest of our lives. Look at the customer, what is the real need of the customer? What are the pain points? Do you need funding and services, or do you need to write essays? Looking at the opponent, what are the strengths and weaknesses of the competitors?
Look at yourself, what are the advantages of our small and medium-sized enterprises? What are my strengths? What are my shortcomings? What is my bottom line, my limit?
Only by seeing these clearly can we adopt the response method of "shutting down, stopping, merging, and transferring".
If possible, you can go overseas. In the past, the performance gap with competitors was in the domestic market, so the opportunity to make up for or even surpass competitors in the future is overseas.
It is necessary to adhere to the "three focuses": focus, focus, and refocus. The forms of focus include, but are not limited to: downsizing, reducing projects, and laying off personnel. Merrill Lynch made statistics during the 2008 financial crisis, and there are two methods of layoffs: one is to cut the meat slowly with a blunt knife, and the other is to cut the mess with a quick knife, and the long pain is better than the short pain. Practice has proven that layoffs are more effective than salary cuts.
Figure 2 Comparison of the performance of companies A and B that have experienced different layoff patterns
It is necessary to divide the accounting unit into small units. Whether it is Kazuo Inamori's amoeba management theory, Caterpillar's "Action Day" in 1990, or Haier's "Rendanhei", they can all be summarized as "small accounting units", and each office, branch, and department is responsible for its own profits and losses, which is an effective way to tide over the difficult period. If you can't take care of your own profits and losses, you will adjust the relevant departments and institutions! In my experience, if your company fails, no one says hello, no one says you are capable. That's pretty straightforward!
Winston Churchill said, "Don't waste a single crisis". In the crisis, we must do these things well: go down the slope and optimize the surplus personnel; Open your eagle eye and search for excellent talents; Reflect on problems and patch management loopholes; Sort out the process and establish an operation system; Adjust the structure and improve corporate governance; Resolve risks and travel lightly in the future; Learn to charge and innovate business models.
It is necessary to transform vertically, and transformation does not change careers. Walking through the wide gate into hell, and walking through the narrow door to see the glimmer of light, is heaven. Learn WeChat, develop vertically, you can work part-time, but don't open a restaurant or speculate in stocks, these seemingly simple industries and businesses are difficult to do well; You can start a live stream, but it's best to sell your own equipment or services.
In the domestic market, it is necessary to adjust the product structure and transform to Zhongda digging.
Follow-through is always operational. Products and services, internal operational efficiency, and business model innovation are the development ideas of enterprises at different stages. When your products and services have no competitive advantage, the only way out is to operate efficiently internally, improve internal operational efficiency, improve per capita efficiency and accelerate the turnover efficiency of factors such as capital, inventory and equipment. Improve the comprehensive operation capabilities of corporate culture, business model, organizational guarantee, execution and crisis management......
Trust in yourself. The outside world can only rely on it, not rely on it. Ask yourself: If there are no external favorable factors, or if external factors have changed, will you be able to survive?
Leadership is the fundamental guarantee for decision-making and execution. Based on Huawei's BLM business growth model, we can improve our leadership level in a targeted manner.
Figure 3 Huawei's BLM service leadership model
It is necessary to rationally develop the aftermarket. The aftermarket has become a "night pot" that is used every time the industry declines. In particular, remanufacturing, for accessories suppliers, there is a complete machine factory, there is a demand for service accessories of production-oriented enterprises, due to the large amount of equipment in the market, the best prospects, the strongest anti-risk ability. For accessories dealers, the life of large and complete large parts centers and small and dedicated dealers is better, and it is not too big or small to be the worst. For social maintenance factories, "high-net-worth equipment maintenance" makes sense, and other costs and competitiveness are not as good as backpackers, unless "people and orders are one". For the second-hand phone business, the price of the new machine is low, and the value-added value of remanufacturing is difficult to show.
The aftermarket is promising, but the market time is not right, and the dealers' capabilities do not match. One step earlier is a pie, two steps earlier is a trap.
You can try to follow the OEM to overseas to do a product and project maintenance service, although it may not be very large, but for small and medium-sized dealers or repair shops, it is not difficult to survive.
I believe that as long as you think rationally and act fully, everything is possible!
If you are still anxious and painful after reading this article, there is another way: try metaphysics. It's not superstition, it's psychology. What is happening to you now is due to fate; Fate has already written everything for you. It's not your thing, it's not yours for your whole life, every node of the industry cycle, the node of your destiny is doomed.
If you can't have the strength to fight against the wind like a big tree, be a dandelion seed, with the power of the wind, go with the wind, and the wind will blow you wherever it takes root, and it will never stop! We must always cherish and be grateful, love ourselves, and wait for the wind to come, where the wind blows, I will go!
I wish you all a smooth ride through the pain valley of this industry downturn!
Zhuozhong construction machinery media organization
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