How Small and Medium-sized Construction Machinery Enterprises Rejuvenate

The trial of Shanghai's 'Restructuring and Renovation' started on January 1 this year has made very good progress. By the end of August, the scale of tax cuts will be more than 17 billion yuan. In the future, we will continue to summarize the pilot experience and further expand the scope and industry of the 'Zhan Gai Zeng' pilot project.

Xiao Bian thinks that the tax cuts are the root cause for the small and medium-sized construction machinery enterprises, the temporary solution, and the other problems of the small and medium-sized construction machinery enterprises.

Under the background of the continuous declining economy at home and abroad, how finance leasing industry can effectively provide financial services to customers has become an urgent issue to be solved in order to help companies to control their own risks and promote healthy and sustainable development of the industry.

It is understood that, at present, China's financial leasing penetration rate is now relatively low, less than 4%. Among them, the most closely linked with the industry, the highest market penetration is the construction machinery financing lease. Financing leasing promoted the development of small and medium-sized enterprises in China's construction machinery industry and made due contributions to economic recovery.

According to the third quarter report of 2012, the construction machinery industry is collectively "turning the car on." Large companies like Sany Heavy Industry and Zoomlion have the strength to overcome all problems; but many small-scale manufacturers will be forced to close within the next three to five years.

How to survive in construction machinery SMEs "The construction machinery industry SMEs persisted in 2012 is very difficult." Su Zimeng, secretary-general of the Construction Machinery Industry Association, said, "In the face of a sluggish market situation, the difficulties that SMEs must deal with are not only so tight. "As we all know, the construction machinery industry is eating "high-iron rice" and "real estate rice." Nowadays, high-speed rail and real estate have been shut down at almost the same time. Customers, of course, will not take the initiative to purchase large quantities of machines as they did in previous years. This is undoubtedly a heavy blow to SMEs. Will the industry warm up by the end of the second quarter of 2012? Obviously, the "winter" is much longer than expected by domestic SMEs, and it is cruel... Every industry has a climax. This is a normal market rule. However, in the face of "winter", what kind of work should the existing enterprises do to enhance their competitiveness? Some industry experts say that “the bad market is also a good time to conduct 'curve overtaking'. The key is to see how the company can handle it.”

Survival method 1: chasing the “gap market” The small and medium-sized enterprises that are attached to the main business in Germany are called “pearls scattered all over Germany”. Their survival methods may give us some inspiration. German professor Hermann. Simon published in 1996 a book titled "The Invisible Champions: Revelations from 500 Unknown Companies Worldwide" that has drawn the attention of the world to these obscure German companies: They are scattered all over Germany and they are numerous, small and large. Most of them are family-owned businesses that are low-key and are truly leaders in their respective market segments. The reason why these "hidden champions" have long been ignored is that their products are only some of the end consumer products, such as the components of the car sunroof; others are so small as to be easily overlooked, such as buttons or drinks Bottle label. Bo Fei, an expert from the Frankfurt University of Economics and Management in Germany, pointed out that one of the salient features of German SMEs is that their products are often targeted at the “gap market” and are therefore difficult to be known by the public. However, once German companies rely on strong manufacturing technologies to establish quality advantages in market segments, they will continue to increase R&D investment and consolidate and expand their leading edge through innovation. For German family-owned companies, the existence of family members makes the entire company's management have long-term considerations for the company's business objectives, and will not give up long-term goals due to short-term performance pressure.

German companies generally have a persistent spirit. Once they enter an industry, they will focus on this, and will never change or become more diversified because other industries are better. This is undoubtedly their success.

Survival method 2: Broaden the industrial chain Instead of putting eggs in the same basket, the company will strengthen its comprehensive competitiveness by expanding its industrial chain. Buffett once said that "only when the wave retreats will it be discovered who is 'naked' in the end." Unfortunately, in the second half of 2011, many companies with unreasonable business practices, a single product structure, and no competitiveness have been knocked out of the game as “naked swimmers”. However, domestic enterprises are not examples of unsuccessful companies. Changsha Porter’s practice may give some hints to SMEs in the industry. The "cold wave" is not without threat to Porter. "Our industry, in the past six months, has had a hard time." Tang Xinyuan, general manager of marketing at Porter Heavy Industries. Liu Kai, a senior engineer at Porter Heavy Industries, told reporters undisguisedly that "in the first three months of this year, the company's sales fell by at least 50% compared to the same period last year." But Porter did not make "the days have always been so sad." In the face of the macro-controls that began in the second half of last year, Liu Kai and Tang Xinyuan thought of a road - along the industrial chain, they expanded outwards and horizontally. If you are involved in welding materials, get rid of the narrow areas of construction machinery. Such as the development and manufacture of aerial work platforms, to make up for the company's concrete machinery manufacturing-led defects. It is believed that the move along the upstream and downstream expansion of the industry chain will soon bring benefits to Porter Heavy Industries.

Survival method 3: When you make full use of the resource industry in your hand, you can help your small and medium-sized companies overcome difficulties. In the Zhangzhuang Gear Industrial Park in Yandu District, Yancheng City, the busy and prosperous production scene of Jiangsu Chixiang Precision Gear Co., Ltd. can be seen at a glance. The reporter noticed that two of the two production lines were respectively linked with the "Cummins Engine Oil Pump Gear Production Line" and the "U.S. Caterpillar Engineering Pump Gear Production Line." Cummins and Caterpillar are all Fortune 500 companies. According to the chairman of the company, only one line of “Cummins” has monthly sales of 3 million, and “the profit rate is at least 15% higher than domestic products”. Changsha Fortuo Machinery Manufacturing Co., Ltd. has also entered into an alliance with big companies. In 2012, the survival conditions of this “winter” FoTuo machinery are obviously not bad. General Manager Li Zhenhua told reporters that at present, the company has signed a one-on-one service agreement with Beiqi Foton, and the company will be able to offset the negative impact of some industry downturns on the company. Beiqi Foton, as a well-known large-scale enterprise in the country, will also provide appropriate supportive policies for subordinate specialized accessory dealers. At present, Fujitsu Machinery still maintains a good operating rate. It is responsible for providing Beiqi Foton with multiple parts production including engineering vehicle compartments, which is already the “second factory” of Foton Motor.

Of course, the current conditions of SMEs in China's construction machinery vary widely. In combination with their own conditions, they each have their own "evolutionary" principle, but the author believes that the above three modes of survival may give some inspiration to enterprises in distress.