Machine Tool Industry: Uneven hot and cold market segments

Like the contrast between the hardship of the real economy and the boom in the domestic stock market, the CIMT exhibition is hard to find, but the machine tool industry is not optimistic.

Indicators confirm the "new normal"

In 2014, new orders for metal processing machines decreased by 2.7% year-on-year, while orders in hand decreased by 0.6% year-on-year. Among them, new orders for metal cutting machine tools fell by 3.5% year-on-year, orders in hand fell by 1.5% year-on-year, new orders for metal forming machine tools increased by 0.4% year-on-year, and orders in hand increased by 1.8% year-on-year.

The sales revenue of the entire industry increased by 2.0% year-on-year. Sales revenue from metal processing machine tools increased by 0.7% year-on-year. Among them, the sales revenue of metal cutting machine tools increased by 0.3% year-on-year; the sales revenue of metal forming machine tools increased by 2.4% year-on-year.

The output of metal processing machines decreased by 2.0% year-on-year. Among them, the output of gold-cutting machines decreased by 1.7% year-on-year, and the output of metal forming machines decreased by 3.3% year-on-year.

The inventory of finished goods in the industry fell by 6.5% year-on-year. The inventory of finished goods from metal processing machines decreased by 0.1% year-on-year. Among them, the gold-cutting machine tool decreased by 0.6% year-on-year, and the metal forming machine tool increased by 3.1% year-on-year.

Total industry profits increased by 11.4% year-on-year, and metal processing machine tools increased by 8.1% year-on-year. Among them, the gold-cutting machine tool increased by 14.9% year-on-year, and the metal forming machine tool increased by 2.9% year-on-year.

In December 2014, the proportion of loss-making enterprises in the whole industry was 31.9%, and the proportion of loss-making enterprises in metal processing machines was 36.7%. Among them, 42.7% for gold-cutting machines and 4.3% for metal-forming machines.

Among the export enterprises, the proportion of private enterprises continued to increase (55.5%), and the share of foreign-funded enterprises (31.5%) and state-owned (including collectives) companies (13.0%) showed a decline. Eastern China (US$5.01 billion), South China (US$2.15 billion), and North China (US$2.06 billion) exported the top three places in the eastern coastal region, with year-on-year increases of 12.2%, 42.6%, and 14.7%, respectively. The trade pattern reflects the increase in the proportion of general trade (85.0%) and the decrease in foreign investment (13.4%).

The industry has a huge ecological change

Chen Huiren, executive vice chairman of the China Machine Tool Industry Association, said in an exclusive interview with the China Industry News reporter: “In the past year, the machine tool industry did not go out of the downward range. The main indicators were basically the same as the previous year, and companies generally feel that the pressure is not small After a few years of adjustments, the industry has also undergone great changes. I conclude that it mainly exists in three areas."

First, user awareness has generally increased. This is due to the formation of a retreat mechanism. As market demand shrinks, it is more difficult for companies to take orders than in the past. Therefore, they pay more attention to product quality, pay more attention to service levels, pay more attention to listening to users, and pay more attention to individual needs. Originally, machine tool companies dismissed the need for personalization because customizing on demand was cumbersome. Today, this phenomenon has been greatly improved, and user awareness across the industry has generally undergone positive changes.

Second, actively explore transformation. Must be transformed! This is a consensus of the machine tool industry at this stage. Everyone is aware that taking the old road of scale expansion is impracticable, and it must take the development path of equal emphasis on quality, efficiency, and differentiation. However, how the specific transformation, the whole industry is still exploring. To sum up, there are several ways.

The first is product and market transformation. The product is not the root of the industry's competitiveness is not strong, at the moment, in some market segments, some companies have achieved remarkable results, part of the domestic high-end equipment into the aerospace field can explain the problem.

The second is the transition from manufacturing to service. For example, Qinchuan Group recently tried to provide a nanny service to manufacturing companies and Shenyang Machine Tool to test financial leasing services.

The third is the transformation of the business model. For example, Shenyang Machine Tool proposed a 4S shop in previous years, and later set up a company named Nice Nice Industrial Services. Dalian Machine Tool proposed to “make a machine like making a car” and learn from the development experience of the auto industry from different aspects.

The fourth is the industrial transformation, that is, turning to the industry other than machine tools.

The fifth is integration with the Internet. The Internet concept of Shenyang Machine Tool has recently been very hot. The Internet was first applied and developed in the tertiary industry. Now it has begun to penetrate the industrial sector. It has achieved success in the light consumer goods field, but how does it merge with the major technology and equipment fields? There are no ready-made cases. Industry companies are actively exploring.

Second, the industry differentiation has become increasingly apparent. Among them, the first is the differentiation of products. The market conditions of light machine tools and heavy machine tools are different. The market demand for heavy machine tools has fallen significantly, while light machine tools have not been significant. The reason is that the stage of high-speed development of China's heavy chemical industry tends to end.

The second is the division of industry. It is mainly the differentiation of the gold-cutting machine and the forming machine. From the statistics of operations in 2014, the growth of the forming machine tool is the main factor, while that of the gold machine tool is mainly the decline. Taking the situation in the first two months of this year as an example, the loss of the gold-cutting machine reached 60%, and that of the forming machine was 40%. The reason is that the weight of consumption in the economic structure is increasing. Since 2011, it has exceeded 50% for four consecutive years. This change has affected the consumption structure of machine tools, while forming machines are mainly used for the processing of consumer goods.

The third is the differentiation between enterprises. Large enterprises and old enterprises are the most affected by changes in demand. Many small and micro enterprises in the low end of the value chain have already withdrawn from the machine tool industry, but some outstanding private enterprises have bucked the trend, such as Beijing Jingdiao and Zhejiang Rifa. The reason is that institutions and mechanisms are increasingly becoming core elements of competitiveness, and private enterprises have advantages in this regard. However, the days of private companies are not always easy, and only focus can be harvested.

Soft issues are hard obstacles

In the face of unfavorable market environment, how can China's machine tool companies break through? Chen Huiren opened five prescriptions in one breath.

First, high-end products strive to cross two thresholds. The development of high-end products must go through three phases: being able to do well, doing well, and making the market competitive. There are many people in the industry and abroad who have misunderstandings and believe that achieving the realm of success is only one step away from success. The so-called ability to do is to have the function of high-end products, that is, to meet the basic parameters. Over the past few decades, we have continued to produce "advanced levels in the world," but we have basically stayed at a level where we can do it, that is, "they don't resemble God," and there is a wide gap in accuracy, speed, and reliability. It is often fast and the accuracy is gone.

"Of course, it can be a big step forward," said Chen Huiren. "Over the past ten years, we have never been able to do it. This is a big achievement in the industry, but this is only a transitional stage. Functionality has been achieved, and performance has come up. Can only be used, but still not necessarily competitive, but also need to improve cost-effectiveness and service."

To do a good job and make it competitive, these two thresholds must be crossed. The biggest obstacle now is that many people in the industry believe that it is the last mile that can be done (in 100 km of the whole journey). In fact, only 50 kilometers have been walked. In this way, the two thresholds cannot be crossed. Because we know and act decisively, we need to invest more than we need, and nobody will invest heavily in the last kilometer.

The second is to take the road of market specialization. If you compare low-end products and high-end products, then the low-end products often come with functional commonality. The main form of service is to provide customers with generic physical products; high-end products are often customized, based on meeting special needs, often accompanied by overall solutions. .

Today, machine tool companies have intensified their efforts in market development out of their instincts. Their ideas are broadly divided into two categories. One is to make a fuss about the breadth, that is, to expand the coverage of the market, to spread the net, and to eliminate dead ends; the other is to make a fuss about the depth, that is, aim at the limited points and dig deeper.

The former is still pursuing the expansion of quantity and is taking the old road; the latter is the upgrading of the structure and the improvement of quality, which is the result of in-depth analysis of market segments. Researching market segments will bring about market specialization.

Specialization can not be said in general terms, Shenyang machine tool lathe, Shanghai machine tool grinder, it is product specialization, is facing the internal professionalism, this is undoubtedly right, but in the high-end market will fail. The high-end market needs market specialization, that is, companies do not do a certain product but specialize in serving an industry. Now, China has almost no such enterprise.

For example, to equip a car engine with German and American companies, a total of more than a dozen of these companies will not serve other industries and only make automotive engine manufacturing experts. If there is no such determination and determination, how can we enter this industry?

The third is to take the road of differentiation. The most problem that China's machine tool industry needs to solve is homogenization. This is more important than the development of high-end products. It is not high-end but it must be different from others. In the past ten years, the industry has fallen into a strategic convergence. The common pursuit of the industry is to become bigger and stronger, and the result must be today's low-end homogeneity.

In particular, along with the market entering the down channel, market competition has become increasingly fierce. Especially in the low-end market, the signs of vicious price competition in the industry have begun to appear, and some companies even use unfair means such as below-cost prices to gain market share. In response to this phenomenon, in December 2014, the China Machine Tool Industry Association issued the "China Machine Tool Industry Anti-Unfair Competition Convention," designed to ensure the healthy and orderly development of the machine tool market, regulate the market performance of machine tool tools, and maintain the machine tool industry. mutual benefit.

Fourth, soft issues must be resolved. If you want to think strategically, you need to classify the issues. Chen Huiren divided the issues into two categories: soft issues and hard issues. Hard problems are the problems of ability, conditions, and even talent. These problems can be solved or basically solved by spending money. Soft issues are issues such as institutions, culture, environment, values, and behavioral norms.

Now that China is not short of money, the machine tool industry is not short of money. Some European veteran machine tool companies are not as equipped as they are at home, and they can refute this view. Therefore, it is time to solve the soft problem. Soft issues are hard obstacles, hard tasks, but also invisible, deep, and essential. This kind of problem is abound and requires great effort to resolve.

The fifth is to look at Internet thinking correctly. Nowadays, the various concepts related to the Internet are dazzling. Big data, cloud computing, artificial intelligence, 3D printing, etc., especially many experts, Internet technology or new generation of information technology is currently infiltrating the traditional industry, cross-border Fusion, comprehensive subversion, it sounds scary, just like the end of the world of the machine tool industry.

In this regard, we must be clear-headed and the rise of the Internet is an important development trend. Now that the machine tool industry is undergoing an unprecedented transformation and upgrading and a new generation of information technology is flourishing, these two trends have historically brought together and provided the industry with Opportunities need us to grasp this opportunity accurately and scientifically.

For the new generation of information technology and the thinking of the Internet, the attitudes of entrepreneurs in the machine tool industry are roughly divided into three categories. The first category is to ignore and passively resist. Think this is far from me, the machine tool industry should study the craftsman spirit. In fact, due to the emergence of smart phones, people’s lifestyles and working methods have changed dramatically. Therefore, the attitude that has nothing to do with me is certainly wrong. The change in the mode of production is something that will happen sooner or later.

The second type is blindly following the trend. We think that traditional industries have no future, and they have come to an end. Some even prefer to manufacture. This is another extreme.

The correct attitude should be active integration. The nature of internet thinking, big data, and so on, provide us with more advanced tools that make us more efficient, communicate more with users, and make information more accessible. To put it bluntly or as a tool, the machine tool industry should use it to achieve the upgrading of traditional industries.