Facing the downward pressure of the Chinese market

2022-10-18
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Facing the downward pressure of the Chinese market, AGCO will build a model of global manufacturing in China

at the 2019 Jiangsu International Agricultural Machinery Exhibition, exhibitors are still dominated by international first-line brands, and they also show their patience and strength in developing in China. Although the Chinese market has been dubbed "recession", "diving" tensile test and other words, their products and attention clearly show their attitude towards the Chinese market

as a leading agricultural equipment manufacturer in the world, AGCO group settled in Changzhou because of its important production base. As a half host, AGCO attaches great importance to Jiangsu Agricultural Machinery Exhibition. Of course, this also shows the importance AGCO group attaches to the Chinese market

Alistair Mclelland, who is currently at the helm of the Chinese market, is an Englishman with a height of more than 2 meters, serving as the global vice president and managing director of AGCO in China. He impressed the author very deeply, not only at the forum held at the Great Hall of the people in China on the 60th anniversary of the founding of agricultural machinery magazine, but also at the opening of his self introduction, he accurately predicted that England would win the world cup, And as a newcomer to China, he is very grounded in the study, judgment, formulation and implementation of marketing policies in the Chinese market

facing the downward pressure and facts of the Chinese market in recent years, how does this senior executive, who has made brilliant achievements in AGCO's marketing system and is an excellent representative of a world-class agricultural machinery manufacturer, view the Chinese market from the perspective of global development? What is AGCO's strategy based on China

face up to the downward trend of China's agricultural machinery market

"the fluctuation of the agricultural machinery market exists in any region, and for the Chinese market, it has its particularity."

people in the agricultural machinery industry should know that the past 2018 has been a great ordeal for agricultural machinery people. Although the official data also provided an increase of about 1% in the main business income, even the official data has given a terrible profit situation, and the profits of Enterprises above Designated Size in the whole industry have fallen sharply by 15.76%

facing the severe situation of the Chinese market, Ali, who has just arrived in China for more than a year, believes that we should treat it rationally. Ali pointed out that the fluctuation of agricultural machinery market exists in any region, and for the Chinese market, it has its particularity. Take tractors as an example, the market of products in the medium and small power segment has a large decline, while high-power products have an increasing trend of clearing deteriorated oil

as Alibaba said, even if the market is so bleak, there are still many bright enterprises and products in the market. Although Alibaba's understanding of the truth of the Chinese market is somewhat different from that at the beginning, especially the difficulties faced by foreign-funded agricultural machinery enterprises in China are much more complex, Alibaba still gives AGCO's China strategy

in terms of tractors, AGCO will introduce new products in the higher power segment to fill the gap of some high power segment products of its large tractors; In terms of harvesters and balers, newer products and technologies will also be introduced, such as round baler MF rb3130f, which was recently unveiled at exhibitions and demonstrations

Ali believes that AGCO's attention to China's agricultural machinery market is not only about what kind of machinery and equipment to provide, but also about how to improve the efficiency and effect of agricultural production. For example, Alibaba is planning with the team to bring the products and technologies of the precision seeding company just acquired to China

precision seeding (click to learn) the company provides not only a seeder, but a series of seeding technologies, such as the detection of the seedbed environment during seeding. Through the collection of soil pressure, organic matter content, soil moisture and other data, we can achieve better seeding effect, reduce input and produce more

embark on the intensive trend of agricultural production

"large scale land management is a trend, and will naturally occur with the government's promotion, the arrival of aging and the reduction of labor force"

but we have to admit that Chinese users are still sensitive to the price of agricultural machinery, and most parts of China are still dominated by the small-scale agricultural economic model. We have also explored production modes such as land circulation and trusteeship services, but in the end, we put things right and suggested "suitability"

although Ali has not been in China for a long time, he understands that because Chinese users are price sensitive, it is difficult to promote high-tech agricultural machinery, which is also one of the root causes of AGCO's current difficulties in China

just like any wise operator will see the future, Ali seems to have a clear idea of the evolution of China's agricultural production model. He believes that although the large-scale operation of land is a trend, this does not mean that the government can achieve it with the promotion, but that with the arrival of aging and the reduction of labor force, it naturally occurs

even so, Ali does not think that China's land intensive management in the next 10 to 20 years will reach the level of Europe and the United States and other agricultural developed countries. "It will be larger than it is now." Ali said in an interview with agricultural machinery magazine

therefore, AGCO not only pays attention to the future, but also adjusts and adapts to the current market

I have to mention agricultural machinery subsidies here. Although the original intention of agricultural machinery purchase subsidies is very good, some deviations have occurred in the implementation, resulting in users paying more attention to subsidies rather than real needs. However, this deviation will not exist all the time. Whether it is market demand or industrial competition, it will eventually pull the market back to rationality step by step

therefore, in addition to the complementary product line mentioned above, Alibaba also proposed to transform advanced technology to adapt to the current Chinese market. For example, the high-tech products of precision seeding company can simplify the configuration and functions and better meet the current needs of Chinese users

harvesting machinery and forage machinery should also be introduced and transformed in the same way, so that the product line and product evolution speed can match the large-scale process of China's agricultural production

build AGCO China Global factory

"Changzhou and Yanzhou are both global chemical plants"

people familiar with the agricultural machinery industry should understand that product introduction and transformation are far from as simple as they seem. One is time, and the other is cost. The two aspects not only bring difficulties to the sales link, but also bring great trouble to the manufacturing factory

as we all know, AGCO currently has two typical factories in China, one is the engine and tractor factory in Changzhou, and the other is the harvest machinery factory in Yanzhou. Some experts believe that if the idea of designing products for China is followed, the operation efficiency of the two factories will not exceed 30%

in other words, 70% of resources will be wasted

moreover, Ali told that both factories were built according to global quality standards. Therefore, this 70% waste of resources will be very expensive

in the face of such a difficult problem, AGCO is much more clever in building a global chemical plant. In other words, AGCO's Changzhou and Yanzhou factories will not only focus on the production of products sold in the Chinese market, but also participate in the cooperation of AGCO's global supply and manufacturing system

Ali told that Changzhou factory is currently mainly used for the production of export products, but due to tariff reasons, products exported to North America are transferred to Brazil for production. In the future, AGCO will bring other products to Changzhou for production. For example, in 2020, Changzhou factory will manufacture vimec tractors for export

Yanzhou factory mainly produces harvesters and balers. Taking the baler as an example, Yanzhou factory is not only responsible for the production of products sold in the Chinese market, but also manufactures many export products here. Ali told that although AGCO has a baler factory in the United States, its products are only supplied to the North American market, and the baler products in other markets are basically from Yanzhou

"put more forage machinery, such as round balers, Dafang balers, and some spare parts products, into Yanzhou for production." Ali said, "both factories (Changzhou and Yanzhou) are global chemical plants."

Postscript: how difficult is it for Venter to come to China

when interviewing Ali, I'm sure I won't miss the topic of fint

as we all know, Fante is a high-end tractor brand under AGCO, and it is the tractor product with the highest scientific and technological content in the world. When AGCO entered China, there was a rumor that AGCO would introduce fant tractors to China. In a twinkling of an eye, decades have passed, and the entry of FENTE products into China is still the dream of many tractor enthusiasts

it is even rumored that the technical standard gb/t50344 (2) 004 for building structure testing says that in 2017, Fante will appear at China's largest agricultural machinery exhibition. After releasing the news, many agricultural machinery enthusiasts left a message saying, "even a glance is good.". However, after a long wait, the Fent tractor did not come out in the end

I once asked Ali twice about the introduction of fant into China. To sum up, fant wants to enter China, the national fatal experimental machine manufacturer of Jinan new era assay instrument Co., Ltd., which should not only meet the requirements of China's agricultural production, but also comply with China's laws and regulations on test identification, emissions, etc., and it is not easy to get subsidies

therefore, the investment is too large and the time cycle is too long from the preliminary research, to the improvement and transformation of products, and then to the test and identification. In a word, it does not meet the economic benefits of enterprises and the requirements of users' real needs

but the good news is that Alibaba and its team are working

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