Analysis of the Present Situation and Strategy of China's Matching Component Market Development

What is a time node in June 2012? One and a half years after the implementation of the “Twelfth Five-Year Plan” strategy, the implementation period of the Implementation Plan for the Revitalization of the Mechanical Base Component Industry will be completed in half a year. In particular, the latter, the results that the "plan" hopes to achieve should now be foreseen.

However, have we achieved the desired results so far? Especially in the large-scale, high-tech products, almost all rely on foreign brands have changed?

The voice of responding to these questions does not seem to be optimistic. The development constraints of the accessory industry seem to have been a “profound problem”. Although we can see that the industry is making continuous progress, it still seems to us that it still seems to be insufficient, at least from people’s expectations. Very far away.

As for the accessory industry, if it continues according to the current situation, it seems that we can all foresee the steady and slow development of the industry's future. For the Chinese construction machinery industry, which is seeking a higher status in the international market, it seems that such a development rate is somewhat weak.

Jia Xiaowen, Secretary-General of the China Construction Machinery Industry Association Supporting Branch, Yao Aimin, Chairman of Anhui Planetary Machinery Technology Co., Ltd., Yu Yuchun, General Manager of Anhui Boyi Fluid Transmission Co., Ltd., and a partner who did not want to disclose his company and his name The person-in-charge of the company (named Li Ming in the article) came to explore the bottleneck encountered by the accessory industry and how the industry can find its way.

The only way to win the status quo in the industry is to insist that during the “12th Five-Year Plan” period, China will become the country with the largest production and sales volume of engineering machinery in the world and the most fierce market competition. At the same time, the "Twelfth Five-Year Plan" period is the golden period for the development of China's construction machinery core components industry. The transformation of China's manufacturing machinery manufacturing country into a manufacturing powerhouse will make the construction machinery core component industry a more arduous task.

Facing the industry's doubts about the development of the accessory parts industry, Jia Xiaowen, secretary general of the China Construction Machinery Industry Association's accessory branch, believes that the current severe situation is both an opportunity and a challenge. The “12th Five-Year Plan” will be the gold for the development of China's construction machinery parts enterprises. At the same time, it is also the stage of reintegration of the accessory industry. As long as the Chinese construction machinery accessory industry persists in the path of localized development, this temporary decline will not be terrible but will be the driving force and will accelerate the orderly development of the accessory parts industry.

It is not for me to predict that by 2015, the sales scale of China's construction machinery industry will reach a scale of 900 billion yuan, with an average annual growth rate of approximately 17%. There will be 300,000 loaders, 250,000 excavators, 290,000 forklifts, 60,000 wheeled cranes, and 70,000 concrete mixers.

During the "12th Five-Year Plan" period, the development goals of the entire construction machinery industry have made the development of the accessory parts industry face great challenges. With the further increase in the total number of mainframe products, it is increasingly difficult to rely on imports to complete short boards. Therefore, the rapid development of local accessory companies can be said to be a matter that must be put on the agenda.

On October 14, 2011, a total investment of 2.6 billion yuan and 600,000 sets of hydraulic components with independent intellectual property rights were put into mass production in Shandong Changlin Group Zhongchuan Hydraulic Co., Ltd. The 22t excavator hydraulic main pump, valve and motor The trial production was successful, and it can completely replace the imported products through the bench experiment and the aircraft test. The downline of the Zhongchuan hydraulic product allows us to see the hope of the core components to achieve localized mass production.

The strategy of China's construction machinery companies going abroad has also become increasingly firm. XCMG, Zoomlion (000157, shares), Sany, Liugong and other companies have recently gone abroad with greenfield investments and mergers and acquisitions. It is an extension of the industry series under the support of the industrial chain, or a single company, which is an important factor to measure whether a national construction machinery industry is strong enough.

Jia Xiaowen believes that in the crucial period of China's transformation from a big manufacturing engineering country to a manufacturing power, the core supporting parts industry for construction machinery should adapt to the situation, carry out structural adjustments, integrate superior resources, strengthen cooperation, and expand the scale. We look forward to the birth of the accessory industry. A well-known corporate brand with core competitiveness.

The painful core parts that cannot be described are the foundations, support and constraints of the development of the construction machinery industry. When the construction machinery reaches a certain stage, the industry's high-tech research will mainly focus on engine, hydraulic, transmission and control systems and other core components. However, with the continuous improvement of the host market, the development of core parts has been somewhat inadequate. The lack of core technologies and talents has made the core parts subject to the human situation and become a pain that domestic companies can't tell.

The dynamic performance of engineering machinery is one of the most important indicators to measure the technical level of products. It includes the two parts of the power performance of the diesel engine itself and the overall performance of the whole machine power transmission system. In addition to constantly improving fuel injection systems and reducing common fuel consumption and low carbon emissions, construction machinery engines have specific requirements for torque reserve and power output mode, performance matching, vibration and noise at low speeds. At present, the engines for China's construction machinery products include Weichai, Shangchai, Cummins, Deutz, Perkins, Isuzu and Yanmar. High-end products, export equipment, large-tonnage equipment, and excavators almost all rely on foreign brands.

The special transmission components for construction machinery include "Dual-Variable Systems," Planetary Rotary Reducers, Drive Axles and Suspension Systems, Slewing Rings, "Four Wheels and One Belt." At present, the R&D level and R&D means of China's construction machinery transmission components have fallen behind the international advanced level for about 30 years, and there are also only a handful of companies that can bear the load spectrum loading test methods in China, and the precision and performance of transmission gears are comparable. The gap between the international advanced level is also quite large.

Hydraulic component is one of the key components of construction machinery products. It can not only reflect the whole machine operation efficiency of the construction machinery products, and the convenience and comfort of operation, but also is the main source of faults in the whole machine work. For a long time, in the aspect of high-pressure and large-flow hydraulic devices, the products of domestic accessory companies are still difficult to meet the matching requirements of the host companies, which makes imports the only choice, especially on excavator products. However, the expensive price makes it “eat up to 70% of the profits of the construction machinery industry” and there has been a passive situation in which local companies have been subject to human control for a long time.

Is it fast and feasible? With the rapid growth in the sales volume of major host companies, the market capacity of China's construction machinery cannot be expanded indefinitely. Faced with such a situation, the core accessory companies must pay close attention to opportunities while paying attention to the new industry. The situation, new changes, and new trends will promptly adjust the company's development strategy and guard against potential new reshuffles in the construction machinery industry.

The development mode of the accessory and host companies is different. Hosts need to be bigger, and the accessory companies are more important. The industry companies must first focus on and specialize in the research and development of products in a certain field, with a view to becoming a field of their own. After real experts, open up other related products.

Technological innovation is the life of a company and the core of its development. The key to technological upgrading is talent. In a fierce and complex market competition, a talented team of highly qualified personnel of all kinds can make an enterprise invincible. Therefore, cultivating and introducing high-end talent is always an important task for companies and industries.

Jia Xiaowen said that the exploration and promotion of core accessories are not a matter of overnight and require talents, funds and efforts. Since 2006, local companies have used the way they have gone for 10 years in one year. This requires great courage and perseverance. At the same time, the core supporting parts industry is a hard industry, accumulating industries. Therefore, China's core components industry should seize the opportunity during the "Twelfth Five-Year Plan" period and use this as an opportunity for the rise of China's construction machinery accessory industry. The most important of these is our persistence. Persistence will be successful, and persistence is victory.

The subtle relationship between the market and OEMs "The OEM can't really give any support."

Li Ming (a pseudonym) said: "Actually, the host company's "feelings" for the local accessory companies are very subtle. Although there are many OEMs in the industry that support the development of local accessory parts, they actually do the best. OEMs are willing to purchase core parts from overseas."

For the top host companies in the industry, product positioning is mostly high-end in the industry. In order to create high-end products in the industry, the host company of course needs the best parts. In the case of strength, almost all parts are completed on the global procurement platform. As for the core parts, Kawasaki, Rexroth and other well-known foreign brands have naturally become the first choice for these companies.

Li Ming said: "Actually, these hosting companies wouldn't want you to make it out." When almost everyone in the industry expressed their wish for the rapid rise of local accessory companies, Li Ming exemplifies himself as a local accessory company. "Bitter water."

He said that the mainframe companies in the industry can be roughly divided into three categories. Due to different reasons, the support of these companies for supporting companies can be described as minimal.

First, mega-enterprises. There are not many companies in the industry that can carry out large-scale global procurement, and there are not many top-notch foreign-funded accessory companies. Therefore, to be able to grasp the overseas supporting channels, for enterprises is equal to master an industry barrier. For other companies, as long as the scale does not reach a certain level, global procurement cannot be conducted at all. This undoubtedly ensures the leading position of large-scale enterprises' own products in the market. Therefore, in the case of large companies, local companies that make core parts such as hydraulic components often do not have a particularly large list.

Moreover, Li Ming discovered that many accessory companies are relatively willing to use you when they are relatively small. Because the cost is low at this time, the accessory company does not have the right to speak; once the size of such accessory companies becomes larger, the host company will start Think of other ideas, such as their own launch of the matching project, or mergers and acquisitions of the matching parts of the company or shares. Li Ming said, "Either way, the accessory companies cannot really get the benefits they hope."

Second, a host company with a certain strength. In the face of other host companies that have already accumulated a certain amount of history and technology, it can be said that only a small number of parts companies can achieve a relatively large amount. These matching parts companies have either cooperated with the host companies for many years, or they have taken the initiative to “hold the thighs”. Li Ming said that the current thinking of their companies is to take the initiative to hold the "thigh" of the host company.

Third, there are still relatively new hosting companies in the industry. Due to the lack of technical strength, these companies do have the ambition to hope that local accessory companies will develop rapidly to achieve localized procurement. Only in this way can they effectively reduce their own costs. However, these companies are also difficult to truly support the supporting companies.

From these three types of companies, it can be seen that both the first and third types of companies are difficult to form effective support for the supporting parts companies; the second type of companies' practices are also limited to limited support within a small area, and have no cooperation with other companies. Supporting companies also have no desire to support.

Although the policy policy is good, but there are many less porridge and more people in October 2010, the Ministry of Industry and Information Technology issued the "reinforcement of the mechanical components industry implementation plan", the implementation period of the program is 2010 - 2012 years. The "Programme" clearly mentions that in the field of construction machinery, it is necessary to support high-pressure piston pumps/motors, high-pressure hydraulic valves, hydraulic torque converters, power shift transmissions, hydraulic electronic controllers, and kiloton heavy-duty transport gears. Equipment, shaft bearings, seals for full-face tunnelling machines, hydraulic transmissions for large-scale mobile machinery, and accessories for drive axle boxes.

Today, it has only been half a year since the end of 2012. In the past two years or so, have the accessory companies really felt the policy promotion? Li Ming said that in the “plan”, the concept of a company above designated size was mentioned, and when the policy was implemented, it was also a relatively large-scale company. In the accessory industry, the size of most companies is relatively small, and it can be said that companies that can receive more policy support are still a minority. Moreover, in the entire construction machinery industry, the size of the main engine plant is generally larger than that of the fittings company. Therefore, a considerable part of the capital has flowed into the matching parts project of the main engine plant. Therefore, for the entire accessory industry, the policy is good, but after all, it's a lot less, most companies can only hope the ocean sigh.

Li Ming does not support these policy-oriented host companies. He believes that the matching parts industry is actually an industry with a very high technological content, especially in some core components, which can be seen from the proportion of the cost of the core components in the overall product. It is actually difficult for the host company to extend the supporting parts business because the output of the matching parts company is generally higher than that of the host company. A host company cannot digest the entire output of a matching part company. Just as the industry has done a good job in supporting product products, it has also been supplying a large number of products to a number of companies in the industry.

Some well-known accessory companies in the industry can also receive support from the government. Yao Aimin said, “The government support that the planets can get will start at 2009 with more than 100 million yuan, and it is expected to exceed 2 million yuan in 2012.” However, from the perspective of corporate development, Yao Aimin hopes to support even more. some. He said that a better factor now is that bank loans are still more supportive to them, so corporate funds are relatively stable. However, companies are still cautious when developing new projects.

At the scientific research level, the financial support for product or technology innovation awards is only a small sum of money for the company's scientific research investment. This is inseparable from the characteristics of the industry. After all, the scale of investment in the construction machinery industry is relatively large. Currently, the supporting parts companies in the industry want to improve the scientific research strength of the company and the scale of investment needed is very large.

There is also an important policy aspect that encourages the formation of group companies, but the accessory companies do not seem to fully recognize this point. Yan Yuchun said: "The acquisition of a small mainframe plant or a large mainframe plant acquired us. We have not considered it. We hope to establish a relationship between suppliers and demanders with the mainframe plant." As for the cooperation between the two parties, He is more inclined to technical cooperation, and this cooperation is deep-level, he said: "We do not want to be behind closed doors, only with an open mind to create higher value." Therefore, he also very much hope that the policy can be Encourage corporate cooperation to be tilted.

The gap between strength dreams and goals Li Ming said that his company invested tens of millions of yuan in 2011 to launch a new modern production line. It seems that the construction machinery industry, which is investing several hundred million yuan and several billion yuan at every turn, is not a big deal. However, he asked in reverse: Among the local accessory companies, there are several companies that can take tens of millions of yuan to invest in? This tens of millions of dollars has already been his accumulated experience as a company with a certain reputation in the industry for more than ten years.

In the eyes of some people in the industry, there is a kind of view on the local accessory companies that "were miserable and angry." However, from the point of view of corporate strength, this view seems to be a bit too hard for us. During the interview, Yao Aimin also counted the economic account for the electricity bill. “I have air conditioning on this side and the factory area plus the office area will cost more than 600 yuan per hour for electric power. Fortunately, only winter and summer every year. 6 In seven months, air-conditioners need to be turned on and they are acceptable on average.” This reflects the full use of resources by the planets. On the other hand, it also reflects that the accessory companies are paying attention when they spend every penny.

Yan Yuchun said that the construction machinery industry is an industry that requires large capital operations, and the funds required for the development of enterprises currently come from the accumulation of the previous period. It is very difficult to rely on external "blood transfusions." In order to survive, companies are striving to achieve their "blood-making."

These companies have become relatively good companies in the industry. In their rolling development process, there are still many hardships. What about smaller companies? The process of accumulation and development of its corporate strength can be said to be even more difficult. In the industry of matching parts, there are a group of companies that form an industrial scale, but the mainstream ones are relatively small-scale ones, and the number is large.

From the perspective of technology, subject to the limited investment in equipment investment, the R&D strength of the enterprise will be affected; the talented person is also a bottleneck problem that restricts the development of the enterprise. It is also difficult to make a big improvement. The phenomenon of encroaching in the industry is also sometimes happening. It is particularly likely to be dug up by the host company. This is also a big blow to the accumulation of enterprise strength.

Moreover, the vast majority of accessory companies do not have their own testing platform. Yao Aimin said that in order to detect the performance of products, many companies often buy host products, replace their original parts with their own products, and then do experiments. This is a huge investment for accessory companies, but there is no way to do so. If you invest in experiments and testing platforms, it will cost you even more. Planets are also biting their teeth and launching experiments and testing platforms, but this is indeed of great significance for product development and production. Yao Aimin thinks this investment is indeed worth it.

It can be said that every local company that manufactures hydraulic parts has the dream of becoming an internationally renowned company such as Kawasaki and Rexroth. However, if every company is going it alone, it will be difficult to grow into a world-class accessory company. For this reason, in the course of the interview, the author also paid attention to collecting ideas for the development of some future accessory parts industries and share them with the readers in the later articles.

A path that can be explored by the technology alliance “To solve the problem of insufficient strength of a single accessory company, the technology alliance is a path that can be explored.” During the interview process, Yao Aimin said that many of the companies that have invested in foreign brands have gone through the same path. This road is also something that local companies can emulate.

He said that in fact the relatively famous world-renowned accessory companies that we can see today do not have sufficient scale in the early stages of development. But some companies choose to join together, you do hydraulic pumps, I do hydraulic valves, there are other companies specializing in hydraulic fittings. In this way, some companies are united to provide the host company with not a single product, but a complete hydraulic system, so that the entire technology-based technology alliance can really gain profits.

South Korea’s construction machinery was once still unknown in the world, but with the rise of Doosan and Hyundai, a group of engineering machinery parts companies in South Korea has also developed its reputation in the world. This industry change is indeed worthwhile for people to go. thinking. Yao Aimin said that the South Korean government once had an indicator of the company's product inspections, that is, his localization rate. This data is mandatory, therefore, this makes South Korea's main engine factory and supporting parts companies join together through technology to jointly solve basic issues such as parts, materials, and processes.

At present, the more appropriate method in China is the cooperation between the parts companies. Although a company's technology and financial strength are insufficient, but through the joint efforts of a number of companies to achieve technology sharing between enterprises, this common research and development of the cohesion of the common parts to solve the problem is still very valuable. This combination does not refer to the integration of enterprises of similar products, but in a system field, such as a hydraulic system, companies that produce various accessories can come together to create a complete hydraulic system.

Previously, there had been a joint approach between the parts companies in the industry, but due to the fact that the distribution of benefits could not be agreed, it did not persist for a long time. In this regard, Yao Aimin said that the formation of this kind of technology alliance must have a leading enterprise, led by leading companies to take charge of the overall situation, and at the same time, each company should be happy to find its own position in the technology alliance.

Instead of setting up a technology alliance, is it because of the consolidation of the industry chain by a relatively powerful company? Is it better to form a group company through mergers and acquisitions? In the face of the author's question, Yao Aimin said that mergers and acquisitions are also a solution, but there are many types of accessories, and each product's process and R&D thinking are very different. The technical barriers between enterprises are still very large, and mergers and acquisitions are by no means a great deal. Easy to do.

Fully mobilizing the enthusiasm of enterprises and forming sufficient industrial thrusts are the fundamental meaning of the existence of the technology alliance. Yao Aimin said that regardless of the size of the company, whether it is large or small, even if it is a matching piece of enterprise with many customer resources, it should have a full understanding of this point and actively participate in the formation of the technology alliance. Moreover, this method of technical cooperation has always been applied to well-known foreign brands. According to his understanding, large companies like Rexroth, even though they already have a lot of product production capacity, are still in the field of certain components. Use cooperation methods.

The modularization of product ideas changes "modularity".

This is one of the biggest words I learned when I interviewed Yao Aimin.

He said that the host product is actually a collection of many systems. In the past, the idea of ​​some companies was to build a system on the main body of the equipment. Now the mainstream of the industry is to agree with the concept of modular combination. The accessory company must grasp this idea, instead of simply positioning itself to provide host products with accessories that are manufactured according to the needs of the host product. Instead, they should take the initiative to modularize the products so that their products can be more competitive. Form your own technological advantage.

The modularization idea not only provides the basis for the technology alliance for the accessory industry, but also enhances the status of the accessory component in the entire industrial chain of construction machinery. Yao Aimin said that prior to this, the previous positioning of the planetary line was exclusively for excavator parts. Now that the product line of thought has been adjusted to a “modular” design concept, after being adjusted on the same product, it can accommodate excavators, rotary drilling rigs, etc. As a result, the product positioning has also been adjusted to include supporting excavators, rotary drilling rigs, and bulldozers.

For the accessory companies, they cannot literally understand themselves as supporting providers. If the product can appear as a modular unit, it can be said that the design of the kit has been changed to adapt to the concept of the host, and it has become a host product design to adapt to the kit product. In fact, this is a reflection of the further upgrading of the concept of industrial production. Each accessory design requires a standardized part composition, and then each accessory is produced in a standardized manner. Only in this way can the accessory product be more widely applied to a variety of products.

Yao Aimin’s “modularity” concept has to go one step further. He said that this kind of modularization not only focuses on a certain accessory product, but refers to the “modularity” of the entire hydraulic system. Taking an excavator as an example, the division of hydraulic pumps, engines, and buckets is like dividing the human body according to heart, lungs, and hand; however, if the hydraulic system, electronic control system, and working device system are divided, it is like The human body is divided into the blood system, nervous system and movement system.

In fact, modular product design ideas and technology alliances are inextricably linked. The modular design has higher requirements for each component because the entire technology alliance sold to the OEM is a complete modular system. The host plant will consider the good operation of the entire system and the matching of the entire machine, and no longer corresponds to one manufacturer for each product component, which greatly saves the purchasing efficiency of the host plant. For companies in the technology alliance, it is necessary for the alliance to undertake the matching work of the entire system.

For host companies, the idea of ​​providing an overall system with a modular approach also saves R&D efforts. The mainframe factory only needs to regard the entire system as a "black box". It only needs to put forward what products it needs and what it wants to achieve. The technology alliance will complete the design of the overall system. In this way, the interaction between the host enterprise and the accessory enterprise can be effectively formed, and the entire technical unit of the industrial chain of the construction machinery can be revitalized so that the industry will not fall to a certain part of the enterprise during the development process.

Modular design is not only a concept, but it is combined with the concept of technology alliance, which is expected to change the status of the comparison among the enterprises in the entire construction machinery industry. Therefore, the accessory companies, what are you waiting for?