"Price reduction is forced to helpless, this is a life and death defense war." Throughout the interview, Shandong Longkou Long Pump Fuel Injection Co., Ltd. (hereinafter referred to as "Dragon Pump") CEO Tang Ju and every sentence seems to be helpless. Magic Balloon ,Magic Arch Balloons,Magic Plastic Balloons,Magic City Balloons NINGBO YAOTU TRADING COMPANY , https://www.nbyaotu.com
Recently, the reporter was informed that the independent high-pressure common rail products have been cut prices, the lowest price reached more than 2,000 yuan. After interviewing a number of independent high-pressure common rail enterprises, the reporter confirmed the news. On June 15th, the reporter interviewed Tang Juhe. After a simple conversation, Tang Juhe summed up the reasons for the price cut with the above sentence, and also confirmed the price reduction.
“High-pressure common rail products of heavy oil, Xinya, Long Pump and other independent enterprises have been cutting prices. After the price cut, the price of light truck common rail products is 2000~3000 yuan, and the price of heavy truck common rail is about 3000~4000 yuan.†The person in charge of the common rail enterprise told the reporter that the price of more than 2,000 yuan is almost "zero profit."
"The price of more than 2000 yuan is only the adaptation price of small batch production. Once the supply agreement is signed and the mass production is realized, the price will continue to be lowered." Tang Juhe said, "There is no way to cut prices, and the price cut is forced." The price reduction of high-pressure common rail products is the trend of the industry." Tang Juhe said.
According to the reporter's understanding, there are currently 7 to 8 mainstream high-pressure common rail production enterprises in China, and half of them are already cutting prices. Insiders pointed out that the domestic independent high-pressure common rail industry has the opportunity to start a "price war". Once the "price war" really broke out, it will bring disaster to the independent high-pressure common rail enterprises.
Competing for the T3 market Due to the large gap between the performance, accuracy and foreign investment of high-voltage common rail products for autonomous vehicles, independent enterprises have not been recognized by OEMs, consumers and the industry. Foreign capital has formed a monopoly in the high-pressure common rail market of China's vehicles, and the living space of independent brands is extremely small. The upgrade of non-road engine emissions to self-owned brands has brought new markets and hopes. The T3 is the third stage emission standard for non-road engines. From October 1st, 2015, the national diesel engines for non-road mobile machinery must meet the requirements of the T3 stage. The implementation of the new emission standards has brought a broad market to the independent brand high-pressure common rail enterprises. “Policy has promoted independent high-pressure common rail enterprises to start to lay out non-road markets.†Yang Yongzhong, general manager of Yunnei Power, said that in the short term, price cuts are not only a competition between independent and common foreign-invested enterprises, but also effective in competing with domestic counterparts to seize the market. Strategy.
Sun Wanchen, director of the internal combustion engine department of the School of Automotive Engineering of Jilin University, said that the product layout of foreign-invested common rail enterprises in the Chinese market is mainly placed in the high-pressure common rail market for vehicles. The total production capacity in China is insufficient to support domestic vehicle and non-road high voltage. Rail demand, the T3 market brings opportunities to independent brands.
The accuracy requirements for non-road high-pressure common rail systems are slightly lower than the common rail system for vehicles; independent brands have advantages over foreign capital in terms of price, oil adaptation and after-sales service; these conditions create conditions for independent enterprises to enter the T3 market. "But to finally win, the most important thing is to grab the non-road market through competitive prices, which is the only way out for independent brands." Tang Juhe said.
Must be 20% lower than foreign capital in order to have a way out. "If you want to kill a bloody road in the T3 field, your own brand must be 20% lower than the price of foreign capital." Tang Juhe said. So, what is the price of competitive advantage for independent brands? “It may be worthwhile to look at the trend of foreign product prices in the Chinese market in recent years. It is understood that in the period of China’s implementation of the national three-emissions period, domestic foreign countries have formed a monopoly of technology, market and price in the Chinese market due to the shortcomings of high-pressure common rail technology. In the absence of alternatives, the price of foreign high-pressure common rail systems is naturally strong. Take Bosch as an example. At that time, the price of high-pressure common rail system for light-duty diesel vehicles was as high as 7,000-8,000 yuan, while the heavy-duty diesel vehicle high-pressure common rail system The price is between 15,000 and 30,000 yuan. With the dilution of Bosch's R&D costs, Bosch has launched an economical common rail product for the Chinese market, and the price has dropped to 5,000-6,000 yuan. In 2014, the industry rumored that Bosch once again on high-pressure common rail products. After the price cut, the price after the price cut was about 3,000 yuan. In the interview, some people in the industry confirmed this.
According to Tang Juhe's statement, the independent high-pressure common rail can only push the price to more than 2,000 yuan to have a way out. The industry believes that although this price is highly competitive, it contains very little profit. It can be seen that although the non-road is a breakthrough for independent brands to survive, the price cuts of foreign products inevitably exacerbate the pressure of independent brands. In order to settle down, it is also a helpless move for independent brands to start price wars on non-road vehicle products.
The price cuts of foreign capital have further squeezed the production space of independent enterprises and increased the concerns and pressures of independent brands. "Bosch's products are cutting prices, and independent brands must cut prices. The two sides compete, the price is the only advantage of independent brands, and only through price reduction, independent brands can enter the non-road market." Zhu Jianming, director of Wuxi Oil Pump Nozzle Research Institute said.
The pressure also comes from the OEM. On June 15, the reporter interviewed a person in charge of Yuchai Power Company. According to the person in charge, most of the suppliers selected by Yuchai in the T3 product field are self-owned brands, such as ASIMCO Tianwei, Nanyue, and Long Pump. Heavy oil, etc. Some of these companies have signed cooperation agreements, some are talking about cooperation, and Long Pump is one of the suppliers that are talking about cooperation. “In all new suppliers, the price of the dragon pump is the most competitive.†The person in charge said that the dragon pump is expected to become a new supplier. It can be seen that after the price cut, the Dragon Pump has indeed won more potential markets. The pressure of price cuts spread to the shoulders of the peers. In the interview, some independent companies indicated that they have been pressured by the OEM. “Because of the price cuts of foreign capital and domestic counterparts, the OEMs have asked us to cut prices as well,†said a person in charge of the domestic production common rail system.
“Once the price war is started, companies that do not want to lower the price have to be involved in this war.†Liu Qi, general manager of Beijing ASIMCO Tianwei Oil Pump Nozzle Co., Ltd. (hereinafter referred to as “ASIMCO Tianweiâ€) said that although Xinke Tianwei has not cut prices for the time being, but the future is not good to say.
In the short term, this road price will bring benefits to independent public rail enterprises, OEMs and consumers. However, in the long run, the "price war" is undoubtedly unfavorable for the development of China's high-pressure common rail enterprises.
Some industry insiders believe that price cuts are a natural manifestation of market economy companies. “The profit that can be obtained at a price of more than 2,000 yuan is very small.†Tang Juhe said that at this stage, the most important thing for independent enterprises is to survive. Zhu Jianming believes that the price reduction of independent brands is a market strategy. Based on the huge challenges of the survival of independent brands, enterprises must first stabilize the enterprise regardless of the strategy adopted, and ensuring survival is the most crucial.
But most people are opposed to the premature arrival of this "war." It is like the tip of the iceberg, but there is a choppy crisis under the sea. “Although at this stage, companies can save themselves by taking price cuts. However, in the long run, companies have not received returns, which is devastating for the industry,†said a person in charge of autonomous common rail enterprises.
Although the rough and simple way of reducing prices has won the market for a while, it will also lead to the lack of sufficient research and development funds to support the technological upgrading of the country and the country. This means that the self-owned brand has lost its market and technology competitive advantage in the next round of competition. This vicious circle makes it hard to see where the future of the independent brand's high-pressure common rail is. "This will be a disaster." Wu Xijin said, "It is against excessive price wars and also against foreign investment in the Chinese market. It is guaranteed that companies that have the necessary profits can continue to go."
"You can only take one step and see if you can see it in the future." This is a sentence that Tang Juhe told reporters at the end of the interview.