Agricultural machinery market demand decline competition intensified

[ China Agricultural Machinery Industry News ] This year, the agricultural machinery market has undergone phased deep adjustment. Faced with the severe decline in demand, agricultural machinery enterprises actively promote demand detection, market intensive cultivation, sales implementation, and actively adapt to market value needs with product management capabilities, avoiding the involvement of the competition vortex in the process of market adjustment and passive.

Agricultural machinery market demand decline competition intensified

First, double-end lifting, multi-directional extrusion, market depth adjustment

Affected by product value, user demand, and market trends, despite the hot sales of a few products, the overall demand for the agricultural machinery market has declined. “The peak season is weak, demand is weakening, and competition is intensifying” has become an obvious feature.

(1) The overall market demand is weakening and market competition is intensifying

The upgrading of the supply end of the agricultural machinery market and the increase in the value of the demand side have become the highlights of this year's market competition. The market developed rationally and the agricultural machinery market recovered from the medium-high speed development to the rational development state. First, the market demand is rationally returning. From the market performance, the overall agricultural machinery market showed an overall downward trend, and demand continued to decrease. In terms of sub-categories, the overall sales volume of large and medium-sized tractors and wheat harvesters reached about 20%, and the sales of corn harvesting machinery were almost half-fold; rice transplanters and crawler harvesters showed relatively good development. In terms of sub-operating machinery, in addition to paddy-type products and economic crop products, the dry-type products showed a significant decline. The second is the rational development of product demand. In terms of product value, the demand for agricultural machinery products increased, and the demand for low-end and mid-range products decreased. Guosan products dominate the market demand, and the vertical axis flow harvesting machinery, power shift tractors and supporting large-scale, composite agricultural machinery products market share continues to increase. Large-scale tractor products of more than 100 horsepower in the northeast region, Xinjiang region and winter wheat region continue to maintain rigid demand, and large-scale rice harvest products in the main paddy field continue to maintain incremental space. The third is the rational advancement of enterprise competition. Going against the water, if you don't advance, you can retreat. Agricultural machinery enterprises strengthen channel management according to market changes, implement terminal sinking, and improve sales targeting. Strengthen customer construction, and implement multi-level and sub-dimension customer maintenance and product promotion through visits, customer discussions, product experience, etc., to increase customer focus and inclination. Carry out promotional activities, seize the needs of users, implement product promotion and personalized promotion, and increase sales of enterprises.

(2) The channel development is weak and the profitability is declining.

The decline in the market, the decrease in sales volume, and the intensification of competition have led to the declining level of sales revenue and profits in some distribution channels, and deeply felt the pressure of competition and development. First, the capital turnover is difficult. The first half of the year was the peak season for the sales of traditional agricultural machinery in China. The sales volume of the main products of large and medium-sized tractors and wheat harvesters reached 70% and 90% respectively. Regional distributors generally make large purchases before the arrival of the peak season, and the overall decline in market sales has made it difficult to achieve the planned goals. Major enterprises in the industry use policy levers to encourage dealers to purchase cash, delays in settlement of subsidies for subsidies in some regional countries, and many factors have caused dealers to use large amounts of funds and have difficulty in turnover. Second, the inventory remains high. After the past year in May, dealers' inventory was basically small, mainly for replenishment in the second half of the year. In the first half of this year, the regional sales distributors formed more stocks of commonly used products such as wheat harvesters and corn harvesters. It is more difficult to sell models that are inaccurate in regional user upgrade requirements. Third, the increase in accounts receivable. In some regions, the accounts receivables generally increased, and the increase was mainly composed of two parts: the fund and the credit. The purchase of the machine is generally approved for the purchase of the difference, and the purchase subsidy is partly borne by the dealer. The risk of the single machine subsidy brought by the adjustment of the purchase subsidy policy and the delay caused by the settlement of the regional state fund will be borne by the dealer. The phenomenon of product credit sales is on the rise. The secondary dealers in some regions are generally weak, mainly relying on the first-level dealers to pay; the user's purchasing ability is insufficient, the dealers are digesting products, giving different levels of credit sales, digesting inventory and increasing receivables.

(3) The user needs to move backwards and the purchase intention is insufficient

Affected by factors such as excessive product holdings, rising purchase costs, low food prices and declining operating income, some regions have insufficient purchasing power and delayed purchase demand. First, the number of regional products has been increasing. The product holdings of some grain-selling regional products are too large, and the mechanization rate of the main links of product cultivation and harvesting exceeds 90%, which has been transformed from an incremental market to an updated market. The market awareness of Guosan products is still in the initial stage, and the wait-and-see attitude has not changed. Second, the cost of purchasing increased. Raw materials such as iron and steel in the mainframe enterprise account for about 90% of the whole machine. The rising cost of raw materials has caused the manufacturing cost of the enterprise to rise. The replacement of the national product has increased the manufacturing cost of the enterprise and promoted the sales price of the product. The subsidy for single-sale products in some regions was reduced year-on-year. The reduction of individual large tractors and harvesting machinery is equivalent to the user's operating income for one year, and the purchase cost of users has increased significantly. The third is the delay in user demand. The operating income has been declining year after year, the user's return to this expectation is prolonged, and the purchase demand is somewhat inhibited. The adjustment of corn planting area has brought about a corresponding reduction in demand. The price of corn crops is sluggish, user income from planting is reduced, and some users choose to postpone or cancel the purchase plan.

Second, the industry is scattered, products are inefficient, and the value is restricted.

China's agricultural machinery industry is still showing a divergent trend, product supply is insufficient, and the industry gap is obvious. In the face of market adjustment, industrial competition has entered a value-led competition year, development year, and elimination year.

(1) Industry from focus to decentralized development

The domestic agricultural machinery industry is large but not strong, refined and not specialized, and the repeated investment and low-effects of industrial resources have reached the key points that must be transformed and upgraded. First, the industrial development is scattered. After years of development, China's agricultural equipment industry has nearly 2,500, of which 185 tractor manufacturing enterprises. Industrial development is not getting more and more focused, but more and more dispersed. In addition to multinational companies, domestic construction machinery industry, domestic automotive industry and other industries entering the field of agricultural equipment, regional birth faces appear every year. Industry resources are invested repeatedly and low-effects are prominent. A number of small and micro-enterprises in the periphery of some leading agricultural machinery enterprises in China are engaged in resources such as manufacturing resources, talents and markets, resulting in the continuous decline of the comprehensive competitive advantages of large enterprises. Second, the synergy is insufficient. Agricultural machinery products are composed of tens of millions of components, and require the cooperation of many enterprises and manufacturing units to produce high-quality agricultural machinery products. From the perspective of market performance, the host companies and agricultural machinery companies lack synergy in research and development, and each has its own battle. The development of mainframe enterprises and components is uneven. The R&D capability of component companies is generally weaker than that of host enterprises, and it is difficult to continuously promote the upgrading of the host industry. Third, the lack of investment in overall planning. If resources are lost, the stop is progress. In recent years, some agricultural machinery enterprises lack the understanding and transformation of interconnected and interactive intelligent manufacturing. They are lacking in the fields of green digital design, laser cutting, flexible production lines, and complete sets of large-scale numerical control equipment. Most of them are both in front of the eyes and lack of co-ordination and long-term. It is also a half-shot ahead of competitors. Core manufacturing capabilities, lack of long-term layout and planning. Some enterprise production lines are still traditionally spread-type layout, low-end manufacturing, low value-added development, and it is difficult to effectively support industrial transformation and the manufacture of medium-sized products.

(2) The operation declines from high income to low income

With the adjustment of the market depth, the operating income of agricultural machinery users is continuously decreasing. Ignoring changes in user operations, elephant-level companies may also evolve into ants in market competition. First, the operating income is extended. At present, the annual cultivation of regional users is generally reduced, the competition is fierce, and the overall operating income is declining; the operating price per mu is reduced by about 10% year-on-year, and the vehicle recovery period is extended by 1-2 years. The operating user is changed from the previous car-buying and other customer operations to finding a homework task before buying a car. Second, product performance restricts revenue. Products with better sales are generally more expensive and of better quality, and prices are not the main problem. The lack of value of the product, the "sesame" small things may evolve into a "watermelon" big thing that enterprises can't get out of. The core issues that have emerged after the switch of some SMEs' national three series products are product quality, function, performance issues and agronomic suitability issues. During the busy season, when the time is high, the problems of the products will affect the user's income, and the relevant agricultural machinery enterprises need to be resolved as soon as possible. Third, there is a lack of guidance on user needs. Although agricultural machinery enterprises can sense the needs and preferences of key users, they can only provide single support from the products they sell. Lack of systematic solutions for the entire process of agricultural planting and the whole process of agricultural machinery operation, lack of professional talents and professional management to guide the sustainable development of household farms, agricultural machinery cooperatives, large agricultural machinery and other customers, to help users achieve good returns.

(3) The technology develops slowly from the low-end to the low-end

The complete foundation and advantages of the domestic agricultural machinery manufacturing system determine the important position and unique value in the global industrial structure and industrial chain. Compared with developed countries, domestic agricultural machinery enterprises still have a lot of room for development in products. First, product competitiveness has moved from the low end to the middle, and the product has achieved a partial lead from imitation to innovation. Due to weak innovation and R&D capabilities and insufficient innovation and creation, the overall situation is at the low end of the international division of labor and the industrial chain. Lack of products and technological innovations have led to slow progress in marketing innovation. Second, the core technology is subject to people, new materials, new processes and other leading-edge forming equipment vacancies; equipment core components cylinders, valves, control systems, hydraulic parts, etc. are certain imports. Third, traditional manufacturing capabilities are insufficient for product acceptance, and existing resources and capabilities are difficult to support product development. As an effective extension of the industrial chain, products do not form a complete value chain, and product development, manufacturing, and sales lack synergy.

Third, interest-oriented, win-win and solid, development needs to be transformed

China's agricultural mechanization is in the mid-term rapid development stage, and market demand remains strong. The system design of comprehensive industrial chain, value chain and customer chain promotes multi-factor agglomeration, multi-advantage superposition, multi-field coordination, and comprehensively enhances the comprehensive competitiveness and development level of the agricultural machinery industry.

(1) The industrial chain is added, and the implementation value is consistent with the competition.

The integration of traditional manufacturing and high-tech industries, the integration of modern agriculture and smart equipment is a development trend and a rare opportunity. Without industrial transformation and product upgrades, the pace of development is likely to stop. The first is to address the issue of imbalanced development and adhere to the issue orientation. Rely on innovation to drive overall improvement in development quality and core competitiveness, and rely on "Internet +" to promote smart manufacturing. Seize the opportunities of deep integration of information technology and manufacturing, and expand the application level of green digital design, laser cutting, flexible production lines, flexible processing lines for key core parts, assembly test benches, and various industrial robots. Fully break through the "ceiling" and intelligent "bottleneck" of high-speed rice transplanters, power shift tractors, vertical axial flow combine harvesters, large-scale composite intelligent agricultural machinery and other products, forming a differentiated advantage. The second is to address the problem of unreasonable technology supply structure and adhere to the goal orientation. Make full use of various channels and platforms, innovate the integrated model of production, education and research, integrate into the global R&D chain and supply chain, and allocate R&D resources and improve manufacturing capabilities from a global scale. Grasping the key links of industrial upgrading, and focusing on improving the development of key infrastructure components, basic processes, basic materials, basic manufacturing equipment and system integration. The third is to adhere to the reform orientation in response to the problem of resource coordination. We will do a good job in industrial transfer, transfer industries with relatively backward manufacturing resources and product technologies and relatively serious pollution to areas with corresponding needs, concentrate on advantageous resources to develop Chinese industries, and seek the position of industrial chain. The implementation of industrial synergy, host companies and supporting enterprises form a coordinated development, build industrial clusters, and build an ecological circle with industrial transformation and product upgrading as the main objectives. Promote industry sharing, establish industrial alliances, strengthen basic weak links research and lack of input, and solve common problems.

(2) Multiplication of value chains for development and synergy of interests

Doing a good job of value synergy between agricultural machinery enterprises, distributors, suppliers and users is the basic guarantee for development. Without the support of win-win interests, the boat of friendship does not rule out turning over. The first is to strengthen the construction of the marketing system. Concentrate on superior resources and capabilities, improve product value and market management and control, and resolve development model and profit growth problems. Implement forecasts to reduce inventory and capital usage. The system optimizes the credit sales plan and reduces the corresponding business risks. Implement strategic sales, reduce credit sales and optimize credit. The second is to build a strategic procurement platform for the supply chain. Implement strategic procurement, connect upstream and downstream procurement processes, help predict and mitigate supplier risks, maintain reasonable profits for suppliers, ensure the quality of purchased products, and promote innovation. The third is to enrich the value of user demand. The user has the right to speak in the market and the right to choose products. According to the user value orientation, we provide products with functional and performance values ​​that meet the needs of users; from single product sales to providing a full set of value solutions, users can feel the value of the enterprise and become a loyal partner of the company.

(3) The customer chain is connected to promote the integration of supply and demand

After completing the construction of customer relationship, “one kilometer” will achieve “seamlessness” of customer needs. Without long-term development, the tide of business will find out who is naked. One is big data analysis and application. The basis of big data analysis is the amount of data, and the more decision models are mastered. Competitors will not give themselves the opportunity to make mistakes, marketing techniques and tactics must be manipulated. Agricultural machinery enterprises should strengthen the analysis of big data, grasp the characteristics of regional users, the model of the main sales, the law of change, study the customer's nature of the competitors, and introduce a combination of supply strategies to achieve competition. The second is the construction and management of customers in different dimensions. The customers are graded and stratified, and the strategic customers are publicly maintained and maintained by the senior management of the dealers, and one-by-one visits and targeted tracking are implemented. Important customers are communicated, communicated and maintained by the middle of the dealership to understand the needs and refer to the referrals. Ordinary customers are interacted by marketers for targeted referrals and personalized communication. Intentional customers are mined, tracked and managed by market pioneers. The third is to guide and help customers. According to the customer's profit contribution and loyalty to the company, the hierarchical management of partner, functional, free and emotional customers is carried out to improve customer satisfaction, support rate, retention rate and reduce churn rate. Strengthen the management of overseas customers' transportation needs, conduct shipping management, familiar with international shipping policies, business operation practices and international conventions, reduce related expenses, and meet export prices, delivery times and product appearance and quality requirements. We will provide customers with product-oriented, price-oriented, and service-oriented management, and strengthen the relationship between agricultural machinery cooperatives, family farms, and large grain farmers.