China's auto market 2004 continues to blow winds who will have the ability to win


The year 2004 was the last year for China's auto industry to implement a quota protection policy. The story that occurred in this year was much more complicated than expected. Manufacturers thought that prices could be rushed and the market could be used to win vouchers. However, the price of raw materials rose. The early release of sales made them feel that this year will be extremely difficult.

On January 5, Shanghai General Motors Sioux, the main model in the economy car market, announced price cuts. Shanghai GM said that after increasing the maximum price of 5,000 yuan, the price of cars dropped by 10,000 to 11,000 yuan. As the main model on the economical car market, the price of Sail has always been a taste of wind vane. Today, Sail is clearly again provoking a new round of price wars for economic vehicles.

One fell in love with the world. We can be sure that the price reduction of Sail will only be a prelude to this year's continuous price reduction. However, the time shift is easy and after the prologue was opened, the repertoire was somewhat different from previous years.

We believe that due to the impact of the general trend, the growth of the auto industry will slow down this year. At the same time, it will also face greater cost pressures, especially economic vehicles and even mid-size cars. At the same time, the capacity of the automotive industry is still rapidly expanding. The speed of launch of new cars did not slow down compared with 2003. Therefore, the pressure on sales of most manufacturers will increase. Therefore, the integration of marketing networks and the improvement of service standards will become the top priority for all manufacturers this year. In this trend, as consumers, in addition to constantly seeing the decline in the price of cars, we will also experience a more detailed and comprehensive service.

Increased manufacturer's costs, slower growth of auto market

This year, automakers will feel the pressure of rising costs.

On December 30, 2003, Xinhua said that due to the need for a certain period of power construction, the power supply in some areas will be relatively tight in 2004, especially in Zhejiang, Shanghai and Jiangsu. In 2005, power shortages will be eased.

Chen Guo, deputy general manager of the State Grid Corporation of China, said that due to the continued rapid growth in power demand, the relative lack of power production capacity over the same period, the overall power supply and demand situation in 2004 will be more severe than in 2003.
According to official explanations, power shortages are mainly due to the fact that some industries are developing too fast. In any case, the rise in coal prices, the main raw material for electricity and power generation, has been unavoidable.

At the same time, the prices of large consumer steels are also rising. At the end of last year, the country announced that the refined oil price will be raised. For a time, the problem of energy shortages has caused many industries to feel uneasy.

The automotive industry feels the same. The tight supply of electricity and the price increase of steel will have a direct impact on OEMs and parts factories. In addition to the increase in costs, power shortages may affect the progress of production, which will lead to adverse sales. For example, the tight-selling best-selling models may have become more tight. This situation may cause dealers to increase sales and consumer dissatisfaction.

The rise in refined oil prices will also have a certain impact on the consumption of automobiles. However, for the moment, the price of 0.1-0.2 yuan per liter has little effect on most private car owners.

For each vendor, another pressure may come from the strain on capacity. Liu Zhijun, the minister of the Ministry of Railways, admitted that the current situation of tight railway transportation capacity is very serious. At the same time, the railway is still the bottleneck of national economic and social development.

The obvious fact is that the six main lines -- Beijing-Shanghai, Beijing-Guangzhou, Beijing-Kazakhstan, Beijing-Kowloon, Bohai, and Zhejiang-Jiangxi -- have saturated transportation capacity and have been operating at an overloaded rate.

The tension in railway transportation undoubtedly means that road transport will share the traffic. Then, under the conditions of full transportation demand, the freight rate of highways will surely increase.

For all automobile manufacturers across the country, the tightness of capacity will affect whether they can quickly and smoothly deliver the car to achieve sales.

Behind the tight energy and transport capacity is the overheating tendency of the economy in 2003. As for whether the economy has overheated last year, there have been various voices in the country. However, it was generally assumed that the economy has become overheated.

The central government has already taken many measures aimed at curbing overheating in some industries and keeping the economy healthy and stable. The increase in bank deposit reserve ratios and restrictions on the real estate industry have begun to take effect.

Based on many backgrounds, Morgan Stanley believes that China needs to take measures to ensure a soft landing of the economy. At the same time, Morgan Stanley believes that the new Chinese leadership will handle the upcoming soft landing and be highly successful.

The Wall Street Journal's visits to a number of investment banks and research institutions showed that last year's GDP growth reached 8.5%, and this year it will be around 7.9%. This means that economic growth may have a slight slowing trend.

The slowdown in the general trend is expected to slow down for the automotive industry. Xu Changming, deputy director of the Information Resource Development Department of the State Information Center, predicts that the production and sales of cars will reach 2.4 million units in 2004, an increase of 500,000 vehicles over 2003, an increase of 26%; the total automobile production and sales volume will reach 5.15 million units, an increase of 750,000 from 2003. Vehicles, an increase of 17%. In 2002 and 2003, the growth rate of automobiles was all over 50%.

Veteran auto industry personage Rao Da said, "All manufacturers can not expect too much this year." The reason is that the speed of supply of the car has far exceeded the speed at which the car enters the home. At the same time, the number of groups that can afford to buy and buy cars is less than the supply rate of cars. The groups that have accumulated over the past few years have been released substantially in the past two years.

However, at the same time that costs may increase and the growth rate may slow down, the production capacity of various manufacturers will continue to increase. The number of companies entering this field will continue to increase, and price pressures will continue to increase.

Reduced price and delay in the mid-level car "Hit"

On December 30, 2003, Guangzhou Honda released its 2004 business plan, saying that Guangzhou Honda will produce 200,000 cars in 2004, an increase of 71% over 2003. In 2003, Guangzhou Honda produced and sold 117,000 cars.

It is not only Guangzhou Honda that can amplify production capacity. Other major manufacturers expressed their continued optimism for the auto market this year with the expected increase in production capacity. Zeng Qinghong, deputy general manager of Guangzhou Honda, said that the market capacity of passenger cars this year will reach 3 million, and last year it was 2.3 million.

Optimistic is not only the mainstream manufacturers, more and more companies are entering the automotive industry. At the end of the year, one of the messages that attracted attention was that the waveguide of a cell phone should also be a car. Consistent with its name in the mobile phone industry, the fighter in mobile phones, Bird wants to become a fighter in the automotive industry.

The reporter received a greeting card at the end of the year and was sent by a friend of the industry who had not been contacted for a long time. The signature on the card is a company name that has never been heard. The friend said that he is currently working at a car company that will produce SUVs and is currently preparing.

According to news, there will be more than 50 new cars on the market this year, similar to last year.

The optimism of various manufacturers will eventually be displayed in the market terminal will be a brutal fight. The weapon that strangles is the price. Therefore, this year's price cuts will really see a red bayonet - in the area of ​​economy cars and mid-size cars.

The price cuts for economic vehicles have made the companies almost unprofitable. A dealer complained that selling a car does not make money. If a dealer only sells economical cars, it will lose out in all likelihood. The profits of car manufacturers on the car are also very thin. Some of them even have no profits and are supported by other models.

In other words, competition in the field of economic vehicles has already achieved full competition. An interesting recent example is the coincidence of the price cuts of Dongfeng Yueda Kia's Maxima sedan and Shanghai General Sail sedan. On December 31, Maxima announced a price cut. The price of the lowest car was RMB 78,800. Coincidentally, on January 5, Sail announced price cuts, the lowest one being 78,800 yuan.

The price of the two cars is so coincident that there are two explanations. First, it is indeed coincidence that it is understandable. Second, Maxima may have received news of SEE’s price cuts. Well, if Maxima gets the news that Saiou dropped to 78,800 yuan, and it can drop to several thousand yuan lower than 78,800 yuan in one fell swoop, then there will be considerable initiative in the market—the price of the economy car market. Very sensitive. After all, Sail is the leader in the economic market, and defeating Sail definitely means a bigger market share. However, Maxima did not do this. Reasonable explanations are cost pressures that cannot be reduced at least at this time.

Peep spot see leopard, in the area of ​​economy cars, most manufacturers and distributors are no longer able to drop. However, price cuts cannot be avoided. Then, the pressure of price cuts will continue to be reasonable - there will be greater price pressure in the mid-size car sector.

In 2003, a number of mid-size cars entered the market. Due to the uneven time-to-market and constraints imposed by the manufacturers, the real competition will begin in 2004.

The competition will undoubtedly come from the price first. Therefore, in the eyes of law, in 2004, the mid-size car will have a round of price competition.

However, the competition in the mid-size car market is not just about price, but the consideration of the comprehensive strength of various manufacturers. The healthy marketing network functions and perfect service awareness that are triggered by this will inevitably bring greater benefits to consumers, and at the same time, it will inevitably cause various manufacturers to continuously improve the level of marketing services.

Who will have the ability to win

The growth rate of the car is slowing down and the price pressure is rising again. The days of most manufacturers will obviously not be as easy as in previous years. At the same time, as the speed of launch of new cars has accelerated and people have made more choices, the days when new cars have become incremental in previous years have ceased to exist. The obvious example is that Shanghai Volkswagen’s two- and four-door GOL launched last year did not contribute much to its sales last year.

This move by Shanghai Volkswagen will in fact give a lesson to all domestic manufacturers. The new car may also lose out of Maicheng, no matter who produced it. This also reminds manufacturers that the precise positioning of models and the improvement of marketing services will be the key to success. Of course, it also includes the strength of manufacturers.

The economic vehicle sector will fully reflect these factors. In the area of ​​economy vehicles, prices are the most sensitive factors affecting purchases. However, with the full competition in this field, the profits of various manufacturers have become increasingly thin. Therefore, for each manufacturer, there will be a big gap in the investment in after-sales service. For example, for a company with a single economy vehicle, because of its low profits, it is naturally unable to invest in after-sales services. For consumers, there are naturally many risks in choosing such a manufacturer's products.

The manufacturers who own the full range of models have overall advantages in the after-sales service. Even if the economical vehicles have a meager profit, they can still maintain a good after-sales service. Then, it can be foreseen that mainstream manufacturers with comprehensive service networks and rich vehicle models will occupy a stronger position in the economy car. The days of those single-model manufacturers will become increasingly sad.

Not only is it an economical car, it is the same in other vehicle types. The survey shows that in the mid-size car sector, buyers are much less sensitive to price than economic vehicles. However, there are higher requirements for various services.

Therefore, in the mid-range car sector, whether various companies can provide services that are well-established will become an important factor in attracting purchases. The same is true of high-end cars. Therefore, several manufacturers are expanding the number of stores, integrating dealer networks, and improving the quality of dealers.

On the other hand, manufacturers and distributors are also forced to provide better service—the growth of cars is slowing down, and the number of possessions is increasing. As the car's growth slows down, manufacturers must devote more energy to maintaining the amount of intensive cultivation, cultivate their loyalty to brands, provide personalized services, and persuade them to purchase a second car.

Although the competition in the domestic market has not yet reached such a level, those who take precautions can always gain more. For foreign companies of joint-venture car companies, their current auto market may be the appearance of China's future auto market.

Therefore, we hope that 2004 can be a year of intense competition—in addition to prices, there are services. We also hope that people can own homes on cars.

Eight Changes in China's Auto Market May Occur in 2004

According to Ding Hongxiang, an expert from the China Imported Automobile Trade Center, there are eight major changes that may occur in China's auto market in 2004:

1. With the continued rapid growth of domestic cars, there may be a turnaround in the overall supply and demand relationship. After the ultra-high speed development period of the automotive industry will enter a period of rapid development, internal management will be refined and more extensive development, investment will tend to rational. Manufacturers in the formulation of strategies, not only in accordance with the needs of the automotive market changes, but also pay attention to changes in the competitive situation.

2. There will be structural oversupply and overcapacity in certain location markets of domestically produced cars. In some location markets, due to the growth of effective demand can not keep up with the growth rate of production capacity, there will be inventory and some excess capacity.

3. The differentiation between domestic manufacturers and brands will be greatly exacerbated. Due to the overall strategy of each manufacturer, model positioning and model competitiveness, production scale and sales scale, production costs and operating costs, brand management and marketing strategies, quality assurance and after-sale protection, the competition among manufacturers and models The forces will quickly divide. Some models continue to sell well, most of them are sold flat, and some may be unsalable. The rapid growth of all manufacturers in the industry will be broken.

4. New models continue to be introduced, and old models are under pressure to reduce prices, and the cycle of updating models is further reduced. Some vehicles that are inaccurately positioned, relatively uncompetitive, and disproportionately sized will be “short-lived”.

5. Competition among manufacturers, brands, and models will be even more brutal. Scale competition, cost competition and brand competition are even more intense. Through competition, the mainstream models of various locations will gradually form and the market will further subdivide.

6. The overall average profit level of the auto industry will gradually decrease with price cuts. Some dominant manufacturers and superior products will still achieve high returns.

7. The car is more and more like a "fashion product", more and more varieties, updated faster and faster, the price is getting lower and lower, the competition is more and more fierce.

8. The auto marketing model will become more realistic and more rational with changes in supply and demand. The era of huge profits from car dealers is coming to an end.

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