Issues of Radical Strategy for Construction Machinery

Machinery Development has been gone for 10 years, with many enterprise strength rapid growths, a series of negative derivative issues should not be ignored.
A spin-off effect with rapid growth of enterprise strength is the production capacity rapidly expands. In a market development stage of sustained rapid expansion in the size, the industry leap-forward capacity expansion will not be particularly noticeable, but once the market space stop the expansion or contraction, then the negative impact will be sharply deteriorated- unprecedented competition in the industry is intensified, enterprises began to do anything to grab a limited market share; idle capacity, a large number of enterprise funds are quilt, the chain of funds tends to fracture, some companies on the verge of bankruptcy …
Many companies in order to grab market has been completely unscrupulous.
Under the various preferential policies’ attraction, a large number of customers that do not have the business conditions in advance enter into the construction machinery industry, which will inevitably lead to increased competition in the case of decline in market demand; plus benefit from the extended repayment, low down payment and even zero down payment, customers often dare to drive down prices in the competition to obtain the construction contract, which greatly impact the higher financing costs and disrupt the order of competition, and ultimately lead to a vicious cycle growing. The consequences of this vicious circle is that contracted engineering user can only let the machine idle, the final encounter manufacturers lock the machine.
It seems that in fact, construction machinery manufacturing enterprises of the growing sales is difficult to benefit from it.
A consequence of the excessive marketing of construction machinery industry is a substantial increasing in receivable accounts, receivables back section is difficult, and the turnover rate is a direct result of the tight business cash flow. Crazy increase in sales promotion and market space to expand the situation is difficult to sustain. China Construction Machinery Industry Association Deputy Secretary-General Wang Venus told reporters the case said, “If the low down payment, zero down payment of enterprise sales model does not be improved, the entire industry will go to disorderly competition, even if get the financial funds, and ultimately will lose market share.”
Su Zimeng, the Secretary-General of the Construction Machinery Industry Association, called more than once in the industry “The competition among enterprises should focus on service, which not only can help enterprises enhance their competitiveness, but also give the user benefits.”
 

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