2020 China Construction machinery marketing & after market conference was held on October 28 of 2020. The conference invited highly influential personnel in China's construction machinery industry to build a high-level platform, focusing on "exploring new value coordinates", gathering consensus from all parties, discussing options, opening a new era under the current changing environment, promoting construction machinery industry cooperation and development.

   Mr. Zhu Wenbiao, chairman and general manager of China Chenggong Heavy Industry Machinery Co., Ltd., shared his experience and made a speech about exploring the new value system of loader industry.

1、Agents' Dilemma

I've personally heard more than 100 true stories from different agents. Some agents’ friends are not born with a silver spoon. Under previous price and quality condition, those friends were forced into debt situation by the manufacturers pressure. This is the wheel loader agents’ dilemma. The topic is heavy, but it must be shared by everyone.

2、Manufacturers' Dilemma

In view of manufacturer, each wheel loader costs around 300,000 yuan (about 46000 USD including VAT). Assuming the breakeven point is 10,000 pcs, it means the total operating costs is about 600-700 million yuan (about 92.3 million USD -- 107.7 million USD). A wheel loader fixed cost is 60000--70000 yuan annually (about 9230 USD – 10770 USD), not including extra cost for maintenance.

3、Clients' Dilemma

Agents friends should take the responsibility for user’s dilemma. Telling customers there are cheap and cheerful products, but the truth is that there is no lunch. The value curve should be a simultaneous increase or decrease in quality and price.

4、Industry Dilemma

Society is not too keen on this industry. Before we re-start Chenggong wheel loader, nobody think we can produce high quality wheel loader as there's no good supply chain.

In any case, this industry is bound to grow, because we are still far behind the world level. There is no reason for this industry to be abandoned. As long as there are construction projects for maintenance and repair, this industry will certainly exist. The key is whether the right path can be found or not.

Exploring wheel loader new value system

Mr. Zhu wonderful sharing and profound insight provided reference for the next step of the development of enterprises in the industry.