China's economy and informatization: Sany Yi Xiaogang: construction machinery is far from homogeneous

Source: China Economy and Informatization

 
Since 2011, there has been a large backlog of products in the construction machinery industry, which has brought the discussion of homogenization to the table. In fact, in recent years, the problem of overcapacity and homogenization has attracted attention from all walks of life because it has been accompanied by the development of construction machinery. However, Sany Heavy Industry (600031. Yi Xiaogang, director and executive president of SH) Co., Ltd. (hereinafter referred to as Sany), believes that "the domestic construction machinery products have not yet reached the step of homogeneous competition. ”
The construction machinery industry has been in a state of rapid development, and this year's product backlog and the slowdown in the pace of infrastructure construction have made the homogenization view very loud. So, will some of the negative views encountered by the construction machinery industry become a fact? To this end, reporter Xiao Longping interviewed Yi Xiaogang, executive president of Sany Heavy Industry Co., Ltd. and chief engineer of Sany Group.
　　Homogenization does not yet exist
Reporter: After nearly ten years of rapid development, the quality of construction machinery products has been improved to the time of qualitative change, what is the sign?
Yi Xiaogang: There is no qualitative change, because a country's construction machinery brand and product quality is a process of continuous improvement, and it will not have a steep change. In recent years, China's construction machinery has developed rapidly, whether it is the status of the international market or the domestic use; Whether it's in terms of quality or performance, the entire industry is improving rapidly. There is no obvious difference between most domestic products and international brands in terms of performance and quality.
However, there are still several problems in the industry as a whole. First of all, compared with foreign enterprises, the production process is still very different, and this trace of Made in China still exists. Someone else's product is like a work of art, but there are some unsatisfactory aspects of our product.
Secondly, some companies do not maintain the country's brand image well in the international market. And this is exactly what needs to be maintained by the entire construction machinery industry. If the enterprise brand wants to gain a foothold in the world, it must be a high-quality product, that is to say, we must not turn the products of China's construction machinery into a synonym for cheap products. Otherwise, the brand of China's construction machinery will never be able to improve. Therefore, we must make high-quality, high-reliability, high-performance products in the international market, and also high-price products.
Therefore, I don't think the qualitative change you mentioned can be said to be a day when such a change will suddenly occur. Running a product is the same as running a brand, it is a gradual and slow process of change.
Reporter: Is this phenomenon related to the homogenization of China's construction machinery products? For example, excavators are because there are too many companies to produce, so the sales performance of excavators this year is not good.
Yi Xiaogang: Strictly speaking, our domestic products have not yet reached the step of homogeneous competition. If it is homogeneous competition, the implication should be that there is no quality problem in construction machinery products, that is, everyone's quality is about the same, and it has met the requirements of users, so it can be called homogeneous competition at this time.
Reporter: Of course, the homogeneous competition I am talking about here refers more to the fact that there is no difference between enterprises in terms of products and product lines.
Yi Xiaogang: That's not going to be talked about yet. Take the excavator as an example, now it is not possible to say that there is no difference between the excavator of one company and the excavator of another company. Take the price as an example, the price of excavators produced by Caterpillar, Komatsu and South Korea's Daewoo is not the same as that of Sany and Liugong excavators, which shows that the products of construction machinery enterprises are still very different.
Why are users willing to pay a higher price for this product than to pay a lower price for other products? Obviously, the performance and quality of the products are still different, so I think there is no homogeneous competition in the entire industry. Now it can only be said that at different levels, enterprises have the phenomenon of price wars. For example, Sany and Caterpillar's excavator products are very good, but the price of Sany can not be the same as Caterpillar's, if Sany continues to widen the price gap, this is the act of killing chickens and eggs, * after Sany slowly has no image among customers, it has formed a low-quality, cheap image, and finally Sany products have no way to sell.
Reporter: You just said that the brand image of China's construction machinery in the international market is not good enough, is it very related to this price war?
Yi Xiaogang: China's construction machinery products are not very good in the international brand, due to two reasons, one is that its own quality has not reached the world-class level; Second, the price positioning is too low, China's construction machinery into the international market, should build a good service system for enterprises, do a good job of products, rather than to impact the international market at a low price, so there is no meaning.
Reporter: The quality problem you just mentioned, the president of a domestic enterprise once said in an interview with this magazine that there is no big gap between China's construction machinery products and international brands. What do you think of this view?
Yi Xiaogang: This is looking at this issue from a different level. For example, when buying clothes, a 60 yuan dress and a 100 yuan dress, can you say that there is no essential difference between the two clothes?
Reporter: If there is no problem with the preconditions, there must be a difference.
Yi Xiaogang: That's it. In all fairness, there are still gaps, especially in terms of refinement, reliability, and ease of operation. It's like a Santana and an Audi (of course, I don't mean to belittle one brand here), both brands of cars are produced by Volkswagen, and Santana doesn't have any quality problems, but can you say that Santana is the same as Audi? It's different, because this kind of quality problem can't simply be realized as a car that doesn't break. Santana can run hundreds of thousands of kilometers, but the comfort level of the user sitting on it, the handling performance and safety performance of the first-class car, and the indicators are completely different. Therefore, we cannot say that a Santana is no different from an Audi, and the same is true in the construction machinery industry.
　There will be no major shuffle
Reporter: In the rapid development of China's construction machinery for more than ten years, Sany has also made a lot of profits, but some scholars predict that your company and Zoomlion will no longer have the glory of the previous years, what do you think of this prediction?
Yi Xiaogang: I don't know what the basis for his opinion is, I don't think he has any basis.
Reporter: Because there is not so much infrastructure construction in China as before, there are more enterprises in the industry, and there are more cakes.
Yi Xiaogang: This is a very superficial judgment. The argument that infrastructure is almost built is not enough to be accepted. How much has our infrastructure been completed? 60%, 80%, or 90% done? This view is unfounded. On the other hand, in recent years, China's infrastructure has grown, how much is the net growth, isn't it more than ten percent? Why does the annual sales of the entire construction machinery industry increase by more than 50%? There are 100% or even more high, what is the reason for this speed?
In fact, this is because the labor cost is getting higher and higher, and the things that were originally done by manpower are now completed by construction machinery. If the infrastructure does not grow at all, the construction machinery will also grow, because the labor cost will be higher, but the labor productivity will want to become higher.
For example, the automobile industry, has the acceleration of development in recent years due to the increase in the number of people? Of course not, because people used to ride buses or bikes. Later, people were reluctant to ride bicycles and bought Santana and Xiali. Later, people felt uncomfortable sitting in Santana and Xiali, and wanted to buy an Audi or Buick. It's the same thing, so those who say this view don't carefully analyze the roots of growth.
Of course, I don't know if we will be able to sustain this kind of rapid growth in the future. I don't think anyone has this basis to say clearly, the annual sales of the construction machinery industry will always maintain a growth rate of 50% and 100%. I didn't dare to pat my chest at this time, because I didn't have any basis.
Reporter: the development of construction machinery to the present, do you think it will experience a major reshuffle to leave some large enterprises?
Yi Xiaogang: In any industry, there will be some companies that are getting better and better, and some companies that are getting worse and worse. Some international construction machinery enterprises will not be able to operate, but this is a normal phenomenon of business operation, not to mention a major reshuffle.
What is the concept of the Great Reshuffle? It's like one day when a big earthquake suddenly strikes, some businesses survive, and some businesses go out of business. In a normal competition process, some enterprises may be unable to operate for various reasons, such as technology, capital, and product quality, and this phenomenon will occur in any industry and any period.
Reporter: In the future, will companies like Sany, XCMG and Zoomlion become world-class enterprises? Will other small businesses shrink their market share or even fade out of the market?
Yi Xiaogang: I don't specifically say which enterprise is running very well, but you said that after the construction machinery industry in China is left with only three giants and four giants, which I think is relatively impossible. This situation cannot occur in a market economy environment, unless the state wants to control and wants to leave these few enterprises. Under the intervention of the state, there may be three giants and four giants left, but after a major market reshuffle in the market environment, there are only three or four companies left, which is relatively impossible.
In a market environment, one small or medium-sized business may go out of business, but another will emerge. The international construction machinery market has been developing for so long, there are large enterprises such as Caterpillar and Komatsu, and there are also many small enterprises; There are enterprises with a scale of tens of billions of yuan, and there are also small enterprises with a scale of several hundred million yuan or even less than 100 million yuan.