Everyone in the construction machinery industry knows that the industry is facing difficulties. When the market was still growing a few years ago, many dealers were no longer making money selling equipment. From the incremental market to the stock market, many dealers are unable to obtain income from the stock equipment, which causes the original dealer system to face huge challenges.
What exactly is the problem? Market down? Price war? Free service? There is something wrong with the industry ecology.
The former industry ecosystem
I often hear people talking about the good old days. What was so good about them? You will make money after completing the project, you will get a refund when you sell the equipment, you will receive money from supplying parts, you will make a profit by selling equipment, you will make money by selling accessories, you will be paid after completing the service, and the user will thank you because you helped him shorten the time During the downtime, he can continue to make money. To sum up: In the past, the industry had a healthy ecosystem.
Although construction machinery was expensive 20 years ago, it could greatly improve production efficiency. It was very popular on construction sites, had a short investment recovery period, and was well received by users.
Once upon a time, everything has changed. The excess of equipment has broken the balance of supply and demand in the value chain, resulting in certain links having a greater say. For example, the engineering party requires the contractor (user) to advance funds for the project, and the user requires the dealer. With price reductions and installment payments, OEMs require dealers to offset sales and have to sell at a loss. Suppliers are forced to accept unequal payment terms from OEMs, and the industry ecology begins to deteriorate.
As "middlemen", dealers have the weakest say. They are often under dual pressure from OEMs and users, and have to make advances, finance, sell on credit, and use their personal assets as unlimited liability guarantees. When they realize that the risks are increasing, When it is high, the best time to exit has been lost.
Industry ecosystem issues
Now, life is difficult for every company, from end users to dealers, parts stores and service providers, from parts suppliers to OEMs, and it will be even harder in the future. Users do not make money by doing projects, they cannot receive payment after completing the project, dealers cannot receive payment after selling equipment, service providers cannot receive payment after completing services, suppliers and parts stores sell parts but cannot receive payment on time, the value The chain has entered a vicious cycle, and problems have arisen in the industry ecology.
The business activities that used to flow in both directions are now becoming increasingly difficult to repay. Debts start from the project side and are passed up one level at a time. The debt is justified. If you don't do it, someone will do it.
What happens when 3,000 devices are sold into a market that requires 1,000 devices? Either only 1,000 pieces of equipment are working, or the operating rate of 2,000 pieces of equipment is only 50%, and another 1,000 pieces of equipment are idle. Those idle equipment will naturally find work at reduced prices, and equipment owners are willing to negotiate various harsh payment terms.
Many companies do not realize that when users have no money to make, the ecosystem enters a dilemma, which is the biggest risk facing the industry. The initiators of destroying the industry ecology are themselves. All these are the consequences of blind pursuit of sales.
Don't think that market sales can grow endlessly, so you desperately lower prices and payment terms to increase sales. Market demand is only related to engineering projects. Overselling of equipment destroys the ecological balance of the industry, and everyone in the industry has to pay for it. . When an avalanche occurs, no snowflake is innocent.
Users who have no money demand zero down payment, free services, and are owed parts. The after-market business is also strangled. Dealers and parts stores are faced with a "vicious circle" that is difficult to get rid of: only credit can be used to close orders, and selling on credit is extremely risky. When collecting debts, we have to beg for help in a lowly manner, while the "old man" who owes the money is arrogant. Normal business activities have become a "luxury accessory". We have to pay a heavy price for such an industry ecosystem.
The way out to improve the industry ecology
Some companies believe that price is an amplifier of market sales, so they continue to lower prices to increase sales. There is no winner in a price war and it will only destroy enterprises, peers and industry ecology. The intensifying price war has left OEMs with insufficient profits for dealers, and the distribution system is facing collapse. For this reason, some OEMs have switched to the direct sales model, which is simply a sign of illness. The root cause of the disease is not the distribution model, but the industry ecology. If a good ecosystem is not restored, any model will be a dead end.
If a dirty village is infested with flies, mobilizing villagers to fight flies is not the answer. Using flush toilets and cleaning the source of pollution is. Lack of innovation and homogeneous product competition will inevitably lead to price wars. Free service, free accessories, and extended warranty are just price wars in disguise, which ultimately destroyed the aftermarket and lost the development opportunities for dealers' existing markets.
OPEC (OPEC, Organization of the Petroleum Exporting Countries) meets regularly to coordinate and unify the oil policies of its member countries, maintain price stability in the international oil market, and ensure stable income and healthy development for oil-producing countries. Everyone in the Chinese construction machinery industry hates price wars, but they have to participate in them. Who is responsible for the chaos in the industry?
As I said in my last article, we must "start from me and start from now." If we do not make changes, the industry ecosystem will continue to deteriorate, and companies will lose their living space sooner or later. Under the cover of the nest, are there any eggs left? Improving the ecosystem is key to the sustainable and healthy development of the industry.
To restore the industry ecology, we must give up price wars, return to our roots, innovate 名媛直播 and technologies, and focus on creating value for users, rather than indulging in the pursuit of sales and various "marketing innovations." If people in the industry cannot work together, the construction machinery industry will become more and more "voluptuous" and become more tired, making it difficult to get out of the ecological dilemma.
