According to the China Construction Machinery Industry Association, the average growth rate of major products in the construction machinery industry, represented by excavators, was 117% from January to February, and the growth rate of excavators was 149% from 2021. But it is worth paying attention to, on the one hand, excavator sales continue to go up, and on the other hand, excavator profits are declining. According to the survey data, in 2020, the average gross profit margin of China's construction machinery agent group is only 8.7% , the average net interest rate is as low as 0.7% , living state is worrying. Some products sales in the forefront of the brand host factory agents even took the initiative to cancel the excavator agent acts. To this end, the reporter interviewed the Honorary President of the Association, Qi Jun, on the market competition of construction machinery industry under the current economic environment, how the host machinery enterprises and agents should create a good market environment and the development situation of the 2021 construction machinery industry. How do you see the competition in the construction machinery industry? How should the trade host enterprise and the agent create the good market environment? Qi Jun: Since August 2016, the construction machinery industry has recovered steadily. Thanks to the state's efforts to increase investment in infrastructure construction, the construction machinery industry has shown five consecutive years of growth in 2021. In 2017, the industry's revenue climbed to 500 billion yuan, and reached 668.1 billion yuan in 2019, up 12 percent from a year earlier, a record high. In particular, in 2020, with the outbreak under effective control, China's economy recovered rapidly and major projects resumed work, creating a vast market for construction machinery. In 2020, the revenue of the entire industry exceeded 700 billion yuan, an increase of more than 10 percent year-on-year. However, with the rapid development of China's construction machinery industry, there are also potential risks. Some enterprises in the industry do not focus on product quality, innovation and customer service, but blindly pursue market share, the disorderly price competition as the only means of market competition, seriously affect the current construction machinery industry market healthy and sustainable development. Qi Jun said that disorderly competition is in the overdraft market. In the price war without bottom line, agents are the disadvantaged group. They not only have to bear the pressure of market share assessment by host companies, but also have to obey the market strategic requirements of host companies, or You risk losing your power of attorney. With the price war, the threshold of business policy is further reduced, the risk is accumulating, the next step for the agent is to face the after-sales service to ensure the lack of profit support, into an unsustainable development model. The end result is that users do not get good products and high-quality services. In this regard, Qi Jun reminded the host companies that they must learn the painful lesson of the market environment slump in 2013 -- 2015, don't "forget the pain" , the result of excessive competition is "no winner" , the systemic risks or debt crises that result from short-term "binge" take years or more to digest, and have already cost companies dearly. Qi Jun stressed that the host enterprises and agents should be the product quality and service to the extreme, to create a good market environment, while ensuring a reasonable profit space, to provide users with high-quality products and services. How do you view the market situation of 2021 industry? Qi Jun: 2021 engineering machinery industry overall market development situation is good. He believed that the 2020 new crown pneumonia epidemic on the country's economy, the government increased investment in infrastructure in the second half of the year, effectively driving the demand for construction machinery. The 2021's GDP growth target is set at more than 6% . In order to promote economic development, the state will continue to increase investment in infrastructure, in particular, a series of initiatives such as the development of the western region, the revitalization of the Northeast, the coordinated development of Beijing, Tianjin and Hebei, the construction of the Yangtze economic belt and the Guangdong-hong Kong Bay, as well as the construction of new-type infrastructure facilities such as the 5g big data center and Urban Rail Transit, and projects to ensure people's livelihood, construction Machinery Manufacturers need to participate, which is China's construction machinery market will continue to grow an important driving force. In addition, on December 29,2020, the Ministry of ecological environment officially approved the release of the "technical requirements for emission control of pollutants from non-road diesel mobile machinery (release draft) " (hereinafter referred to as "the fourth country") , the emission control technical requirements for the fourth stage non-road diesel mobile machinery and its installed diesel engines are stipulated. According to a letter from the Ministry of Ecology and environment, the fourth national emission standard will be formally implemented on December 1,2022. The promulgation and implementation of the policy will force the host manufacturing enterprises to make preparations for the switch of emission standards. It is understood that in the construction machinery market, there are 10 million re-use construction machinery, most of the first, second national standard construction machinery products are still in the market. Along with the country to the environmental protection policy request is day by day strict, these environmental protection also not up to the standard equipment, is entering the phase out gradually. Further speed up the renewal of construction machinery industry. This shows that China's economic development space is huge, the scale of infrastructure construction is huge, coupled with the country's increasingly stringent environmental protection, construction machinery market is still in an upward period, construction Machinery Industry is driven by both stock renewal and incremental demand. Qi Jun said that the growth pattern and tone of the 2021 industry will not change, will continue to maintain steady growth, and forecast that this year the overall growth of the industry will be more than 7% . Conclusion Qi Jun stressed that both oppose to engage in price union, but also firmly oppose to industry disorderly price competition. He called on host computer enterprises and agents to maintain a good mentality, based on a long-term perspective, seize the moment, assume the corresponding social responsibility and industry responsibility, consciously abide by the industry self-discipline convention, and strive to cultivate their core competitiveness, improve product performance and service level, formulate marketing strategy and business policy in reasonable profit space, and compete in an orderly way. Host enterprises and agents should strictly adhere to the bottom line, strictly control risk, coexistence and win-win, cherish the hard-won good development of the industry.
