Most construction machinery dealers and users in China do not have a clear concept of renovation. Many people even think that "renovation" is actually another explanation for overhaul. In fact, renovation is far different from overhaul. It has strict standards in equipment selection and delivery inspection. More importantly, renovation is a comprehensive ex factory performance recovery of equipment to a certain extent. As a second-hand construction machinery equipment, it has higher quality and better performance.
1. Equipment renovation is different from overhaul
What is renovation?
Strictly speaking, refurbishment refers to a process method that only keeps the basic parts of the equipment, updates all moving parts, and finally restores its manufacturing standards. It is at the highest level in the field of construction machinery maintenance.
Some experts believe that the maintenance of construction machinery within its service life can be divided into three levels. The highest level is renovation. It is the disassembly and reorganization of the whole machine and belongs to the category of remanufacturing. Each refurbished equipment is refurbished from inside to outside, from machinery to electronics, so as to ensure that the performance index of the equipment reaches or even exceeds the standard of new equipment (original machine). Secondly, it is generally referred to as equipment maintenance, which is a means to replace all damaged parts on the basis of maintenance of main components, so as to restore the main function and normal working state of the equipment. The lowest level is the simple maintenance of mechanical equipment, that is, the maintenance and lubrication of the equipment to ensure that the equipment is in good working condition.
The difference between refurbishment and overhaul is that equipment overhaul focuses on repair, while refurbishment focuses on the renewal of moving parts and the renewal of basic parts. It is the concept of "repair" and "replacement". Refurbishment refers to the overall disassembly of the whole machine, and the re detection and new treatment of all basic components according to the original parts standard, including the processing of unqualified shaft holes, crack detection and correction, so as to restore all parts of the machine to the original size, and then reassemble and test with new moving parts to meet or basically meet the original standards.
In addition, technology upgrading is also a major feature of the renovation, which can optimize the equipment performance through the improvement of the original control system and executive components. For example, Jinan Fuqiang Power Co., Ltd. can refurbish and remanufacture the Steyr engine lower than the Euro II standard to make it meet the Euro II standard. Maintenance is a technical measure taken to maintain the good technical condition and normal operation of the product in the use stage. It is often random, in-situ and acute. Maintenance and refurbishment follow different principles in the replacement of parts. Equipment overhaul is more about correcting damaged parts. For example, the pin shaft of a certain part of the equipment should have been in transition fit, but with wear, it may have reached the range of clearance fit. At this time, refurbishment is to replace parts to solve this problem, while overhaul is to install washers Sleeve way to restore the original transition fit.
From the flow direction after equipment renovation, renovation can be divided into customized renovation and pre-sale renovation. Customized refurbishment refers to a service mode in which the equipment is refurbished through user customization and then returned to the user. This kind of renovation is a service behavior carried out by the renovation manufacturer on the basis of consultation with users, which is similar to overhaul. During the whole renovation process, users supervise every link of the renovation. Some parts that have not reached the service life can be retained according to their own wishes. The manufacturer provides reference opinions, and explains the possible service conditions of the equipment after repair and whether the enterprise can provide quality assurance.
Pre sale renovation refers to the renovation for the purpose of selling second-hand equipment. Because the refurbished equipment has no specific customers predicted, the enterprise can only carry out strict refurbishment inspection according to certain manufacturer standards, formulate corresponding technical instructions, indicate the basic technical parameters such as engine power, and then enter the market as a kind of equipment between the new machine and the traditional second-hand construction machinery.
Renovation process
After buying back second-hand equipment from users, the refurbishment manufacturer shall comprehensively collect and inspect the previous use data of the equipment, including use time, working environment, maintenance records, etc. After that, all the equipment shall be disassembled for flaw detection of all basic components, and then the engine, hydraulic system, electrical system, chassis and other working accessories of the equipment shall be renewed in an all-round way. Finally, add new moving parts for assembly, and the whole machine can be sold after passing the performance test. At present, almost all enterprises engaged in equipment renovation have formulated a set of inspection standards for refurbished equipment with reference to the factory standards of new machines, and provided a certain equipment warranty period accordingly.
However, not every equipment or any period of each equipment is suitable for renovation. Equipment with low technical added value, short service life and low value is not suitable for renovation. Experts also suggested that if the cost of equipment renovation exceeds 65% of the value of the new machine, there is no renovation value. At present, the whole machine renovation business is more concentrated on imported equipment with high value and high technology, such as large mining equipment, milling machine, paver and hydraulic excavator.
2. The second-hand construction machinery market is full of chaos
In recent years, with the continuous improvement of the technical strength of domestic construction machinery enterprises, China's construction machinery market has gradually changed from dominated by foreign brands to dominated by domestic brands. However, this good situation has not affected the second-hand market, and foreign brands are still more sought after in the second-hand construction machinery market. For a long time, China's second-hand construction machinery market has been plagued by the problems of opaque information, unclear product quality and lack of Finance and supervision. The second mobile phone and post market have been in chaos.
Import
New machines are used and old machines are renovated
Hundreds of millions of smuggling and import cases are common
In recent years, second-hand construction machinery smuggling cases are common.
In June 2019, Huangpu Customs successfully cracked a major case of smuggling second-hand excavators with underreported prices, with an initial estimated value of about 1.82 billion yuan.
In August 2020, Huangpu Customs announced to the public that it had successfully cracked a case of smuggling second-hand excavators at a low price, with an initial estimated value of about 860 million yuan.
In November 2021, the anti smuggling Bureau of Huangpu Customs successfully cracked a case of smuggling second-hand excavators at low prices, with an initial estimated value of about 550 million yuan.
We can get a lower price declaration by making old machines, and smuggle those old excavators that originally belonged to the goods prohibited by the state into China through the renovation of old machines... With the same routine and the same location, we can easily smuggle hundreds of millions of dollars. We can see how much huge profits there are!
Some people may think that it is a good thing for users to buy foreign famous excavators at a very low price. However, these smuggled and imported second-hand construction machinery and equipment tamper with the original factory data and information, and there is no after-sales service and safety guarantee. The ultimate loss is the interests of users.
Export
Asymmetric information and lack of channels
Difficulties in exporting domestic second-hand construction machinery and equipment
Corresponding to the desperate smuggling of imports, China's export of second-hand construction machinery and equipment is a long-standing difficulty. Although China is the world's largest construction machinery production and marketing country and stock market, the export scale of second-hand construction machinery equipment is relatively small. The main reasons are the asymmetry of transaction information between the buyer and the seller, the lack of service supporting facilities and channels and so on.
First of all, different from the purchase of new machines that tend to be standardized, the different needs of each buyer for the purchase of second-hand equipment are more like customization. It is very complicated to find suitable second-hand equipment for customers.
Secondly, China's current trading and circulation of second-hand construction machinery equipment still lacks clear industry norms and standards in terms of evaluation and pricing. Due to the lack of evaluation and pricing standards, once the second-hand equipment with inconsistent information and poor working conditions is purchased in the procurement, it will greatly increase the cost of traders and affect export transactions.
Third, as the parts of second-hand equipment of construction machinery are made in China, there are few domestic parts in foreign channels, the level of technicians is not high, and there is no professional after-sales warranty, which makes the after-sales service of second-hand equipment imperfect.
In addition, some foreign users are still biased against Chinese brand Chinese equipment. These factors are the obstacles and risks faced by the export of second-hand equipment of construction machinery.
Some people say that if the main engine factory is allowed to participate in the sale of second-hand equipment, many obstacles may be reduced. Indeed, host enterprises can expand leasing business and help new machine sales. If driven by interests, they can naturally lead the development of second-hand business. However, at present, the input and output of second-hand engine manufacturers are not proportional.
3. Circulation system and market value of refurbished equipment
Sources of old equipment from the current market situation, the old equipment used for renovation mainly comes from four ways. The first is the equipment during overhaul. Like some imported equipment, many equipment have been used for about 10 years, with low work efficiency, high fuel consumption and frequent maintenance, which has caused a lot of inconvenience to users. On the one hand, users have high loyalty to the equipment, and the equipment has not entered the scrapping stage and is not willing to be scrapped. On the other hand, overhaul can not completely solve the existing problems of the equipment. Renovation is needed to improve the service performance of the equipment instead of frequent maintenance. The second is to trade in the old for the new. In recent years, after mortgage and other sales methods, the old for new as a sales method closer to users has won the favor of users and sellers.
With the development of trade in business, manufacturers and dealers have accumulated a certain amount of second-hand construction machinery to be sold. At this time, renovation provides them with a more mature business method of second-hand construction machinery. The third is market recycling. With the continuous development of the second-hand market, professional second-hand equipment operators are gradually increasing. They operate second-hand equipment by recycling old equipment in the domestic and foreign markets. However, general equipment maintenance can not guarantee the efficiency and safety of second-hand construction machinery. Due to the lack of quality inspection ability, enterprises dare not provide quality assurance, resulting in unsalable equipment, which requires second-hand construction machinery operators to apply better technology and process for the new treatment of old equipment. The fourth is the exit of financial leasing equipment.
As a new way of equipment sales, financial leasing is gradually rising in China's construction machinery industry. Although it has not had a significant impact on the second-hand equipment market, we can predict that in a few years, when a large number of financial leasing contracts expire one after another, some leased equipment will enter the second-hand construction machinery market for renovation. At present, in the domestic market, the renovation business of the first two kinds of equipment is carried out more, and the latter two are rare.
Market value of refurbished equipment most refurbished manufacturers believe that if the new machine market is called the first market, the refurbished equipment is just in the second market. Compared with the traditional overhauled second-hand construction machinery, the mechanical performance of the refurbished equipment can basically meet or even exceed the standard of the new machine (original factory equipment), and its construction efficiency and safety performance are not inferior to the new machine, but far lower than the new machine in price. The survey results of manufacturers engaged in renovation business show that the actual price of refurbished equipment is between 50% and 70% of the price of new machines, while the price of self owned equipment sent by users to manufacturers for renovation is only about 30% of that of new machines.
Obtaining high performance and high reliability at a low price is a major basis for the existence of renovation business. In addition to the renovation of users' own equipment, the focus of second-hand construction machinery users in purchasing refurbished equipment is still on the high cost performance of the equipment. In addition to the price factor, work efficiency, reliable performance and after-sales service are also the most important factors that enterprises consider when purchasing second-hand equipment. Due to its reliable technical performance, the refurbished equipment has the potential of a new machine. At present, most refurbished manufacturers will provide a warranty period of about one year for the refurbished equipment sold. In terms of parts supply and maintenance services, the same standards as the new machine are also implemented, which greatly facilitates users.
The refurbished second-hand construction machinery of the customer group has its advantages in price and performance, and will naturally be favored by users in the second-hand market. From the perspective of the market flow of refurbished equipment, the refurbished equipment is mainly faced with such users after strict inspection, namely, original equipment users, small and medium-sized second-hand construction machinery users, lessors, etc. In addition, there are many refurbished equipment flowing into the international market. In addition to providing renovation services for its major domestic users, such as Antaibao coal mine, Tianjin west also carries out the renovation business of second-hand construction machinery and equipment around the world.
Equipment renovation the main equipment renovation is different from equipment maintenance in a simple sense. It has a high standard in maintenance resource allocation and organization setting. It is generally believed that equipment renovation enterprises should have complete technical data of refurbished equipment, senior technical personnel, various processing and testing equipment and other conditions.
At present, the main body of refurbished second-hand construction machinery business is mainly concentrated between equipment manufacturers and large agents. From a technical point of view, the manufacturer has great advantages, complete data, mature technology and complete processing equipment. In terms of the use process of the equipment, the agents have a slight advantage. After the equipment is sold from the agent store, they have always undertaken after-sales service. They are more clear about the equipment failure, have complete technical data and strong equipment maintenance system, and their control over the renovation process is more practical. In addition, large maintenance enterprises with strong technical strength may also become a member of the renovation team. It is believed that under their joint promotion, the renovation technology will gradually mature.
4. Brand promotion and strengthening standardization are the fundamental to change the current situation
In the past two years, the purchasing agent market has declined more and more. On the one hand, the epidemic has affected going abroad, and the main reason is the rise of domestic brands. Domestic brands such as Li Ning, Anta, pelaya and perfect diary have greatly squeezed the share of Japanese, Korean, European and American brands, and even caused a national wave overseas.
Similarly, in construction machinery, under most working conditions, the equipment of domestic brands is not inferior to foreign brands, but the residual value rate of foreign brands is still higher than that of domestic brands. Therefore, improving technology and brand, relying on strength to reverse the stereotype that domestic brands are inferior to foreign brands, and establishing and improving industry norms and standards such as evaluation and pricing are the fundamental way to change the current situation.
