As the price of raw materials has soared again, the small and medium-sized motor industry that is caught in the low-cost labyrinth is hard to bear the burden. Recently, 16 companies jointly issued an initiative to implement a new price system.
On April 25th, the Second Member Congress of the Small and Medium-sized Motors Branch of China Electrical Equipment Industry Association made an important decision: from now on, the implementation of “industry-level price†in the whole industry, self-study implementation with “industry level price†The benchmark quotation method is no longer quoted to the merchants based on the “90-point priceâ€; the new motor price system is gradually established and implemented. In his promotion of the “Industry Level Price†implementation report, Chen Weihua, the secretary general of the branch, stressed: “We must increase the guidance of industry level prices and assume the responsibility of industry supervisionâ€.
The pain of low-cost competition The annual output of China's small and medium-sized motor industry is 50 million kilowatts from a decade ago, and the output value is 6 billion yuan. Last year, the output jumped to 130 million kilowatts and the output value exceeded 20 billion yuan. However, behind the scenes of booming and prosperous production, the profits of the whole industry have fallen sharply. Even a company with an output value of more than 1 billion yuan has a profit of less than 20 million yuan.
At the current price, some small and medium-sized motors have already experienced the phenomenon of cost and price upside down. The huge cost pressure has made many companies unbearable. Chen Weihua told reporters that the main materials of the motor, silicon steel sheet, electromagnetic wire, aluminum, cast iron and shaft steel account for about 90% of the total cost. He has calculated an account. In recent years, the price increase of only silicon steel has increased the cost of small and medium-sized motors nationwide by 2.1 billion yuan. In particular, the price of enameled wire has doubled in recent times. The current price has nearly tripled since the beginning of this year. Line and shaft steel have increased by 62% and 85% respectively in the past two years. In particular, the recent enameled wire line has risen by nearly 50%. According to this calculation, the raw material cost of the product has exceeded the sales price of the product.
Since 2002, price has been the focus of the discussion of motor industry CEOs, and has become the most sensitive topic in the industry. "We have repeatedly tried to raise the selling price properly, but the attitude of the company is negative, which has caused the industry to be in a difficult crisis for a long time." Zou Mengqi, the acting director of the small and medium-sized motor branch, is worried.
This is a strange phenomenon. Why are companies not willing to raise the price, or even "satisfied" to "discount" users?
It is understood that most of the products produced by the small and medium-sized motor industry are products that have been designed or jointly designed by the whole country. The technical standards and production processes are basically the same, the quality is basically the same, and the preferred means of market competition is price competition. In addition to the homogenization competition, the industry's concentration has been continuously improved, which has further exacerbated the fierce competition. Statistics show that the output of small motors in the top 10 companies has reached 87% of the industry's output.
Low-cost competition seems to be a cliché for the motor industry. The real problem is that if you don't respond at a low price, the company will lose the market under the premise of homogeneity, and the price can be said to be the key to success. And the competition that breaks the bottom line of reasonable prices seems to have no real winner. Without a reasonable level of income, the industry lacks stamina and delays the process of becoming bigger and stronger.
Yang Cheng, general manager of Hebei Electric Co., Ltd., who has many years of experience in corporate management, pointed out that the current situation of low-price competition pointed out that the key problem is that supply exceeds demand. Now enterprises are fighting for resources and fighting for the market. The investment is more than enough.
Zou Mengqi introduced that in 2005, the export volume of small and medium-sized motors exceeded 1 billion US dollars, and the total export value of various motors has reached 3.392 billion US dollars. It has become one of the five major export-oriented foreign exchange products in the electrical industry, but long-term large-scale low-cost exports have led to low-cost enterprises. There was no accumulation in the development process. Now, we have encountered high costs such as rising raw material prices, lower export tax rebates and changes in the RMB exchange rate.
Motor companies are very clear that China's export motors are mostly low-end products, and the technical content has always been a short-term for domestic enterprises. Long-term suffering from low profits has made enterprises unable to upgrade their products. The benefits of meager profit can only become the "world factory" for low-end products. ".
Chen Shaobo, chairman of Fu'an Donganbo Electric Group from the national motor production base, said with emotion: "One out of every four motors exported by China is from Fu'an, but the Fuan motor industry is facing a crisis today." He believes that Jidong 90% of the motors are exported, most of which are OEM. This kind of dependence on foreign companies, the market will be replaced by others at any time.
Four times to incite "value positioning fulcrum"
Zhang Shengde, director of the Office of the Small and Medium-sized Motors Branch Secretariat, told reporters that the earliest implementation of the price system in the motor industry was “80 constant priceâ€. After more than 10 years of evolution, it gradually transitioned to “90% of the priceâ€. With the implementation of the new tax system and the fluctuation of raw material prices, the “90% price†has a significant deviation from the actual cost of motor products. He recalled that in 2000, he organized enterprises to formulate "industry-level prices": because the "90-yuan price" was deeply rooted in the concept of enterprises and customers, the "industry-level price" was not implemented. In 2004, the rise in the prices of several major materials has made it difficult for enterprises to bear the burden of raw material prices and costs. For this reason, the club once again organized the “industry level priceâ€.
Zhang Shengde explained that the purpose of formulating the "industry level price" is that when the price of raw materials fluctuates, the "industry level price" fluctuates accordingly, so as to avoid the deficiencies of "90% of the price". Compared with the former, it is closer to the actual situation of the company to set the sales price. According to estimates, at that time, the "industry level price" rose by an average of 48% over the "90% price". As companies worry that price changes will lose the market, all kinds of contradictory psychology form obstacles to the implementation of the new price system. In the next two years, despite the skyrocketing prices of raw materials, it only increased by a few percentage points based on the current selling price. Four times to develop a plan, four abortions, and never fundamentally solve the problem.
In fact, the CEOs of motor companies in the low-cost competition circle have realized that selling products at a price lower than the cost, at the expense of profit for development, not only the enterprise, but also the entire industry. To this end, they took measures to actively seek for breakthroughs. In an interview with the reporter, the general manager of Anhui Weinan Electric Co., Ltd. said bluntly that we have changed the concept of making the company bigger and stronger to become stronger and bigger. He believes that if a company is strong, it must have its own special and special products. In recent years, they have insisted on independent innovation and developed machine tools that are in short supply in the market, creating considerable profits.
In the face of export markets, the industry still faces opportunities and pressures. Authoritative data shows that in the future, the demand for electric motors in the international market is still very large, which is undoubtedly a good opportunity. However, due to GE, Emerson in North America, Siemens, ABB, VEM in Europe, WEC in South America, and Dongyuan and Datong in Taiwan have formed regional giants, and the pressure on motor exports, especially OEMs, is increasing. To improve their counterbalance, they must plan ahead. Chen Shaobo, who has rich theoretical and practical experience, has served as the vice president of the Fu'an Electric Machinery Industry Association. He has repeatedly said that to remove the synonym of “low-end products†of Fuan Motor, it is necessary to improve manufacturing technology and create a strong brand as soon as possible.
The sword refers to the price system and the price trend of the motor industry is not only a distortion of the market rules, but also threatens the healthy development of the industry. In his letter to the Secretary-General of the branch, Chen Weihua, the delegation of Zhejiang Jiaxing Xinhuanian Motor Co., Ltd. revealed the counterfeit and shoddy behavior of individual companies intending to replace the electromagnetic wire with cheap aluminum wire. At the same time, they said clearly that “the market must be resolutely rectified. Order can completely contain counterfeit and shoddy products." Li Chao, chairman of Chongqing Sailimeng Motor Co., Ltd., and Huang Zhuling, vice chairman of Changsha Motor Co., Ltd., have a deeper understanding of this. They believe that the supervision price is not as good as the quality of supervision, and it is necessary to vigorously promote the production of products with “good value and good qualityâ€.
When enterprises consciously shift the focus of competition from price to quality and brand, it is undoubtedly a breakthrough and progress in the traditional business philosophy. In the low-cost market, small and medium-sized motor companies are not only physically and mentally exhausted, but some enterprises are in a state of zero accumulation or even loss-making. To this end, they have to work hard to get out of this strange circle. Hebei Electric Machinery Co., Ltd., Chongqing Sailimeng Motor Co., Ltd., Anhui Weinan Electric Co., Ltd., and Lu'an Jianghuai Electric Co., Ltd. jointly issued a proposal to establish a new price system and take the road of quality and efficiency.
Yang Qiming, the vice chairman and secretary general of the China Electrical Equipment Industry Association, which has always been concerned about the price changes of the small and medium-sized motor industry, fully affirmed the innovation of the price system. He believes that the implementation of the industry level price is an effective measure to purify the market and is an improvement. He encouraged companies to dare to engage in active exploration.
For the results of the price system "waste and new", the small and medium-sized motor branch attaches great importance to it and will strengthen supervision during the active implementation. Chen Weihua revealed that the market price department has been established, with the focus on always paying attention to the price fluctuation of raw materials in the market, and accepting complaints from enterprises about price ignorance. Timely intervention will be given for outstanding or serious violations. He also revealed that in order to further purify the market environment, the small and medium-sized motor industry has formulated and adopted industrial conventions for the production and sales of products, and stipulated the terms of fair competition in the marketing process.
The authenticity of this information has not been confirmed by the international electrical network, for your reference only.
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