Changing the competitive landscape to change the road machinery enterprises must be careful
In recent years, China's construction machinery industry has developed very rapidly. Almost all sub-sectors have shown relatively high growth rates. By comparison, road machinery has not shown strong growth momentum and has been showing a trend of gentle growth. Except for graders, the sales of other major domestic road machinery in recent years have basically maintained at a level several years ago.
Ji Guangcai, Chairman of the China Road Machinery Branch of the China Construction Machinery Industry Association believes that the overall development of China's road machinery is very robust, but with the changes in the industry structure and the impact of market factors, many of these problems have gradually emerged. How does this seemingly unanimous pace of development explain, and how should the future development of the road machinery go? Relevant person in charge of enterprises needs to pay great attention.
The development situation is mixed
After 2005, China's road construction entered a new period of rapid development. The five major highway network construction projects such as China’s expressway network, rural road network, and comprehensive transportation network kicked off one after another. At present, the total length of highways in China has exceeded 30,000 kilometers, and the total length is second only to the United States. According to statistics from related departments, it is estimated that the total mileage of China's expressways will reach 84,800 kilometers by 2035, when China will become the country with the highest number of highways in the world.
Overall, there is still great potential for China's road traffic construction. Ji Guangcai said that the great development of China’s highway construction has provided a huge market opportunity for the entire construction machinery industry, and the high investment in highway construction has provided sufficient economic guarantee for the purchase of construction machinery. At present, the demand for road machinery is very large at home and abroad. In 2007, China's highway investment was 750 billion yuan. This year's China's highway investment budget still maintains a relatively high level. In addition, the export volume of China's road machinery is still increasing.
Regarding the issue that most of the sales of road machinery products have not risen sharply in recent years, Ji Guangcai believes that there are two possible reasons: First, in the highway construction of previous years, the increase in market holdings was too rapid, making the market for new products. Demand is not strong; second, some of the state's investment funds are used to offset the increase in cost caused by raw material price increases, resulting in an inability to reflect market demand. In recent years, raw materials continue to increase in price. In addition to the relatively low value of technical added value and relatively large profit margins for maintenance machinery, other products suffer a greater impact. This factor cannot be ignored.
In addition, although China's investment in traffic construction is very high, but overall it shows a trend of low investment growth rate, which is also an important factor restricting the rapid development of road machinery. According to industry insiders, this aspect is due to the basic formation of the highway network in the major regions of China. The indicator of “average 30 minutes in the eastern region, 60 minutes in the central region, and 120 minutes in the western region on average†has already been basically achieved in many regions. On the other hand, the pressure on railway transportation is too great, and the emphasis of traffic construction is on railways. In contrast, the demand for highway construction is not as pressing as it was in previous years. The current highway construction project is relatively at a relatively steady growth stage.
Market competition is becoming increasingly fierce
China's road machinery market is currently in a relatively stable period of development, users and companies are more rational. Brands, quality, technology, and services play an increasingly important role in marketing. At the same time, the industry structure and the nature of enterprises are constantly changing, and the competition in China's road machinery industry is becoming increasingly fierce.
First, BMW, Dynapac, Ingersoll Rand and other internationally renowned brands with strong technical and economic strength set up production bases in China. Almost all of them take the form of sole proprietorship, and the world's advanced level will directly impact the Chinese market. In the past, the object of technology introduction turned into a competitor standing in front of Chinese companies. This will undoubtedly have an important impact on the industry structure of China's road machinery. At present, these companies have established a foothold in the Chinese market.
The business of large construction machinery companies covers the road machinery products. Xugong, Sanyi, Zoomlion, Liugong and other large companies have set up specialized road machinery companies to mass produce road rollers, paver machines, milling machines, and mixing equipment. With the advantages of product brands, sales channels, and strong technical strength that are molded in the field of construction machinery products, many of these companies' products have already dominated the market. Their intervention will undoubtedly significantly increase the strength of China's road machinery industry.
In addition, a number of small and medium-sized private enterprises in China have grown rapidly. Enterprises such as Liaoyang Zhuji and Shenyang North Traffic Heavy Industry Group have taken a very important position in asphalt mixing equipment and maintenance machinery; the original Xi’an Zhuji and Zhenjiang Huachenhua A number of established companies, such as Tongtong, have also adapted to market changes by deepening reforms.
At present, the technical level of China's road machinery manufacturers has been greatly improved. It is close to the world's advanced level. The era of relying on imported technology to promote development has ended. The development cycle of large-scale asphalt mixing equipment, pavers and other products will generally not exceed one year. . However, the products of our country's enterprises still have defects such as low precision and insufficient performance. In the increasingly fierce market competition, whether these shortcomings can be overcome as soon as possible is directly related to the rapid development of Chinese enterprises.
Obstacles cannot be underestimated
According to Ji Guangcai, the road machinery industry has the characteristics of relatively small product demand and quicker update, so SMEs can adapt more easily. At the same time, however, the scale of the company is small, and its ability to resist risks is small. In particular, many companies currently adopt a credit selling method and have a low rate of return. This makes the company's liquidity insufficient and development hindered. This method needs to be changed.
At present, the products of domestic enterprises have generally converged, and there are few original innovations and landmark technologies. The innovation of enterprise products focuses on the control system, and its core technology is similar. This has a lot to do with the company's investment in technological innovation, and this is the "old fault" of road machinery companies. This requires business leaders to change their concepts and have a long-term sense. They should not only consider whether the company can receive results in the short term, but must continue to invest in technology. In this regard, large companies have comparative advantages, and they can rely on the Group's technical center to develop new products step-by-step.
In recent years, the export situation of China's road machinery products has been very good. The growth rate of some products is very large. And a large part of the products are sold to Europe and the United States. However, due to insufficient understanding of the product standards, access conditions, and certification work in the other market, Chinese enterprises have suffered many losses in trade. Enterprises should carefully study the characteristics and requirements of overseas markets and learn to protect themselves in international trade.
As China's highway network becomes more and more sophisticated, the proportion of road maintenance work will gradually increase, and the demand for maintenance machinery will increase substantially. Ji Guangcai said that the technical value of maintenance machinery is relatively high, and the impact of raw material price increases is relatively small. Enterprises can adjust their own production plans accordingly, which can avoid risks and prepare for the market's next demand; Other road machinery suffers a greater impact. Enterprises should, on the basis of ensuring the quality of products and services, rationally increase product prices and meet market demands.
Ji Guangcai, Chairman of the China Road Machinery Branch of the China Construction Machinery Industry Association believes that the overall development of China's road machinery is very robust, but with the changes in the industry structure and the impact of market factors, many of these problems have gradually emerged. How does this seemingly unanimous pace of development explain, and how should the future development of the road machinery go? Relevant person in charge of enterprises needs to pay great attention.
The development situation is mixed
After 2005, China's road construction entered a new period of rapid development. The five major highway network construction projects such as China’s expressway network, rural road network, and comprehensive transportation network kicked off one after another. At present, the total length of highways in China has exceeded 30,000 kilometers, and the total length is second only to the United States. According to statistics from related departments, it is estimated that the total mileage of China's expressways will reach 84,800 kilometers by 2035, when China will become the country with the highest number of highways in the world.
Overall, there is still great potential for China's road traffic construction. Ji Guangcai said that the great development of China’s highway construction has provided a huge market opportunity for the entire construction machinery industry, and the high investment in highway construction has provided sufficient economic guarantee for the purchase of construction machinery. At present, the demand for road machinery is very large at home and abroad. In 2007, China's highway investment was 750 billion yuan. This year's China's highway investment budget still maintains a relatively high level. In addition, the export volume of China's road machinery is still increasing.
Regarding the issue that most of the sales of road machinery products have not risen sharply in recent years, Ji Guangcai believes that there are two possible reasons: First, in the highway construction of previous years, the increase in market holdings was too rapid, making the market for new products. Demand is not strong; second, some of the state's investment funds are used to offset the increase in cost caused by raw material price increases, resulting in an inability to reflect market demand. In recent years, raw materials continue to increase in price. In addition to the relatively low value of technical added value and relatively large profit margins for maintenance machinery, other products suffer a greater impact. This factor cannot be ignored.
In addition, although China's investment in traffic construction is very high, but overall it shows a trend of low investment growth rate, which is also an important factor restricting the rapid development of road machinery. According to industry insiders, this aspect is due to the basic formation of the highway network in the major regions of China. The indicator of “average 30 minutes in the eastern region, 60 minutes in the central region, and 120 minutes in the western region on average†has already been basically achieved in many regions. On the other hand, the pressure on railway transportation is too great, and the emphasis of traffic construction is on railways. In contrast, the demand for highway construction is not as pressing as it was in previous years. The current highway construction project is relatively at a relatively steady growth stage.
Market competition is becoming increasingly fierce
China's road machinery market is currently in a relatively stable period of development, users and companies are more rational. Brands, quality, technology, and services play an increasingly important role in marketing. At the same time, the industry structure and the nature of enterprises are constantly changing, and the competition in China's road machinery industry is becoming increasingly fierce.
First, BMW, Dynapac, Ingersoll Rand and other internationally renowned brands with strong technical and economic strength set up production bases in China. Almost all of them take the form of sole proprietorship, and the world's advanced level will directly impact the Chinese market. In the past, the object of technology introduction turned into a competitor standing in front of Chinese companies. This will undoubtedly have an important impact on the industry structure of China's road machinery. At present, these companies have established a foothold in the Chinese market.
The business of large construction machinery companies covers the road machinery products. Xugong, Sanyi, Zoomlion, Liugong and other large companies have set up specialized road machinery companies to mass produce road rollers, paver machines, milling machines, and mixing equipment. With the advantages of product brands, sales channels, and strong technical strength that are molded in the field of construction machinery products, many of these companies' products have already dominated the market. Their intervention will undoubtedly significantly increase the strength of China's road machinery industry.
In addition, a number of small and medium-sized private enterprises in China have grown rapidly. Enterprises such as Liaoyang Zhuji and Shenyang North Traffic Heavy Industry Group have taken a very important position in asphalt mixing equipment and maintenance machinery; the original Xi’an Zhuji and Zhenjiang Huachenhua A number of established companies, such as Tongtong, have also adapted to market changes by deepening reforms.
At present, the technical level of China's road machinery manufacturers has been greatly improved. It is close to the world's advanced level. The era of relying on imported technology to promote development has ended. The development cycle of large-scale asphalt mixing equipment, pavers and other products will generally not exceed one year. . However, the products of our country's enterprises still have defects such as low precision and insufficient performance. In the increasingly fierce market competition, whether these shortcomings can be overcome as soon as possible is directly related to the rapid development of Chinese enterprises.
Obstacles cannot be underestimated
According to Ji Guangcai, the road machinery industry has the characteristics of relatively small product demand and quicker update, so SMEs can adapt more easily. At the same time, however, the scale of the company is small, and its ability to resist risks is small. In particular, many companies currently adopt a credit selling method and have a low rate of return. This makes the company's liquidity insufficient and development hindered. This method needs to be changed.
At present, the products of domestic enterprises have generally converged, and there are few original innovations and landmark technologies. The innovation of enterprise products focuses on the control system, and its core technology is similar. This has a lot to do with the company's investment in technological innovation, and this is the "old fault" of road machinery companies. This requires business leaders to change their concepts and have a long-term sense. They should not only consider whether the company can receive results in the short term, but must continue to invest in technology. In this regard, large companies have comparative advantages, and they can rely on the Group's technical center to develop new products step-by-step.
In recent years, the export situation of China's road machinery products has been very good. The growth rate of some products is very large. And a large part of the products are sold to Europe and the United States. However, due to insufficient understanding of the product standards, access conditions, and certification work in the other market, Chinese enterprises have suffered many losses in trade. Enterprises should carefully study the characteristics and requirements of overseas markets and learn to protect themselves in international trade.
As China's highway network becomes more and more sophisticated, the proportion of road maintenance work will gradually increase, and the demand for maintenance machinery will increase substantially. Ji Guangcai said that the technical value of maintenance machinery is relatively high, and the impact of raw material price increases is relatively small. Enterprises can adjust their own production plans accordingly, which can avoid risks and prepare for the market's next demand; Other road machinery suffers a greater impact. Enterprises should, on the basis of ensuring the quality of products and services, rationally increase product prices and meet market demands.
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