2012-08-08
Having been in the industry for over twelve years, Mr. Chen, an excavator agent, has never encountered such a predicament before. Started acting as an agent for sales in Korea before 2000Doosan excavatorCurrently, it is the general agent of Doosan in a certain province.
As of July, the company has already advanced more than 9 million yuan, but it can no longer afford it and can only consider withdrawing. "Mr. Chen described that agents like him are ubiquitous in the excavator sales field, but in the face of the overall industry dilemma, his advance scale is relatively small, with" some agents advancing nearly 100 million yuan ".
According to statistics from China Second hand Construction Machinery Network, although the sales of all excavator models increased by 4.1% year-on-year in 2011, this data has been significantly declining since May 2011. From January to July 2012, domestic sales were only 76225 units, a year-on-year decrease of about 39.88% compared to the same period last year when 126784 units were sold.
I can't see to the end
Since 1992, China's national economy has undergone four major macroeconomic adjustments, in 1998, 2004, 2008, and 2011. Mr. Chen has personally experienced it three times.
The adjustment time in 2004 was very short, and everyone can see that it came suddenly and went fast; the adjustment time in 2008 was longer, but the adjustment amplitude was relatively stable; and the current adjustment, which started around August and September 2011, really cannot see the end, "Mr. Chen said.
In order to cope with the predicament, Mr. Chen tried various methods.
Firstly, increase the down payment ratio. The common sales method in the excavator industry is that excavator manufacturers outsource sales and services to agents, who sell or lease sales to end customers. But driven by the once booming domestic infrastructure construction investment, thousands of agents of nearly a hundred excavator brands often reduce the down payment ratio to attract customers in the face of high industry gross profit.
In a prosperous year of economic growth where excavator owners can make money, this strategy is not a problem. However, once excavator owners cannot make money, and even cannot afford the "monthly payment", agents often have to use their own funds to advance the monthly payment for excavator owners in order to maintain their brand agency qualifications.
Mr. Chen's approach is no exception. But now, in order to control risks, he will carefully screen customer qualifications and strictly implement the agent policy of 10% down payment.
Secondly, it is to collect monthly payments and even reclaim machines.
When the market was good, agents would help customers advance the down payment, but now the market is poor, and it is very difficult to recover the 3-month down payment that was advanced. The machines purchased by customers either have no work to do, or the construction payment cannot be recovered after doing work. Even monthly payments have become a problem, and it is even more difficult to recover the down payment. "Mr. Chen said that in order to reduce risks, after some customers delayed repayment for more than 6 months, he recovered 9 excavators for self operated leasing.
But the problem is that in the face of sluggish market rental demand, Mr. Chen's risk is actually greater - all responsibility for repaying the brand manufacturer's debts becomes the agent's own; The rental rate of reclaimed machines is not high, and even if they are rented out for work, the rental fee cannot be recovered.
Mr. Chen had no choice but to start financing and lay off employees. His company had already reduced its workforce from over 60 at its peak to just over 20 people.
It's been a year, it's really not moving, "Mr. Chen said.
Industry consolidation
As the category most closely related to the development of national economy in the construction machinery industry, excavator demand is often the leading indicator of economic prosperity, and its highly positive proportion with fixed assets investment is even considered as high as 90%.
Masahiro Sakane, president of Komatsu Production Institute, the world's second largest construction machinery enterprise, once quoted the data of the American Equipment Manufacturers Association (CIMA) in his book Komatsu Mode, pointing out that in the 1990s, the demand for construction machinery in Japan, the United States and Europe basically accounted for 80% of the world's total demand, and Japan alone accounted for 40% of the world's demand for construction machinery around 1990, when Japan's economic foam peaked.
At present, the demand for construction machinery in China accounts for more than 40% of the total global market demand, and China is known as the "half of the world's construction machinery market". According to CIMA's statistics, in 2000, the Chinese market accounted for only about 20% of the global market.
Obviously, the continuous year-on-year decline in monthly sales of excavators since May 2011 fully indicates that the integration of the Chinese construction machinery market, especially the excavator industry agents, has arrived.
There are already many excavator agents like Mr. Chen who are preparing to withdraw, among which Doosan's agent withdrawal rate is relatively large. The former "top player" in the Chinese excavator market is facing a critical reshuffle.
InKomatsuPreviously, Doosan once held the top spot in China's excavator sales ranking. In 2011, Sany's sales surpassed Komatsu again. After local excavator manufacturers in China occupy about 40% of the market share, Komatsu still has nearly 10% of the market share, while CAT Piler has slightly increased by nearly 10%. It is not surprising that Doosan's sales have declined An industry insider who declined to be named said.
The integration of the industry is definitely coming, and the first priority is the integration of agents. In fact, the exit and integration of agents have always existed, and have changed with the development of the industry. This is just a rational choice of both manufacturers and agents, which is a normal business behavior. A few years ago, the domestic construction machinery market grew too fast, and now it is facing overall difficulties. Just like people, it is impossible to run at high speed all the time. The stable growth stage of the industry has arrived, "said Feng Guiying, Secretary General of the Agent Working Committee of the China Construction Machinery Industry Association." Agents cannot advance funds for sales first; manufacturers and agents must work together to overcome difficulties and jointly cope with the current cash flow shortage and inventory risks
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