How does Chinese equipment manufacturing enter Latin American market from the perspective of construction machinery

In the past few years, many Chinese equipment manufacturers have begun to enter Latin America, seeking to connect with the local market. This paper takes construction machinery enterprises as samples to observe the record of Chinese equipment entering Latin America. These enterprises entered the Latin American market earlier or later, and sought docking paths are different, but they are all taking solid steps toward the vision of capacity docking between China and Latin America.

Latin America is an attractive market with 34 countries and nearly 600 million people. There is a huge infrastructure need compared to Europe; There are huge resources and relatively more funds than in Africa; It was a difficult market with complicated laws, high taxes, language barriers, high Labour disputes and protectionism.

Go or not? How to get to? What's the point of going? For a long time, these questions have been on the minds of many Chinese equipment men with ambitions in Latin America.

If the answer is not immediately available, it is worth stretching the scale of time to consider a longer dimension: more than 100 years ago, the world's three largest machinery industries were the United States, Germany and the United Kingdom. In 1913, the output value of the machinery industry of the three countries accounted for 82.4% of the world, of which the output value of the machinery industry of the United States alone accounted for half of the world; More than 100 years later, China's equipment industrial output accounted for 1/3 of the world's equipment manufacturing exports in 2014 reached 2.1 trillion YUAN.

Where is the bleak autumn wind, in the world. When Chinese equipment becomes an existence that can not be ignored, it is inevitable to go out, and docking is born from this. The domestic economy needs to improve quality and efficiency and upgrade, and there is a huge demand in the foreign market.

Sany Heavy Industry: the after-sales service is as fast as the enemy

Sany, which opened an office in Brazil in 2007, got an earlier start in Latin America. At that time, the Latin American crane market was dominated by American and Japanese enterprises. U.S. company Caterpillar has been in Brazil for more than 60 years, while Japanese company Komatsu has been in Brazil for more than 40 years, leaving sany with little market space.

The first two years at Sany were difficult. Eight years ago, Mr. Xiao, SANY's foreign affairs director in Brazil, was pitching SANY to different clients every day. 'Is it SONY of Japan? A 50-page invoice book, used for two years, with more than 10 remaining. He recalled that time, when he just came, he had no experience, and the threshold of agent selection was relatively loose. As a result, 8 out of 10 agents were dishonest and defaulted on accounts, which delayed us about two or three years.

Complex laws and policies, such as taxes, labor union problems and inefficient negotiations are also problems faced by every Chinese company entering the Latin American market. For example, when the two sides discuss a contract, the Opinions of the Brazilian side will not be put forward all at once. One punctuation will be changed today, and another word will be changed a few days later. What can be accomplished in two or three months in China will take 4-6 months in Brazil. XiaoHua said.

After 8 years of changing agents, patiently negotiating with labor unions and studying various laws and policies, Sany's lifting equipment has occupied 40% of the Brazilian market share, and Xiao hua has issued more than 100 invoices in a month. Looking back at the past 8 years, our achievements are attributed to many aspects, such as high quality, high cost performance, products meeting customer needs, but the most noteworthy is the efficient pre-sales and after-sales service. Trinity Latin America region general manager Xu Ming said.

Taking pre-sale financing as an example, financing difficulty is an inevitable problem faced by every equipment enterprise entering Brazil. Brazilian spending habits are so unique that installment payments are common. In other countries, when you sell a device, you either pay for it immediately or at least a year later. In Brazil, it takes three to five years.

Instalments require financial backing, but most Local banks are not interested in financing equipment, and when they do, annual interest rates are often 18-20 per cent higher. Although CDB offers a low-interest loan at only 6-8% a year, to protect the industry, it is only available for products made in Brazil, such as Caterpillar. Sany, even after setting up a factory in Brazil, only assembles them locally, which still does not qualify for low-interest loans.

We have to compete with Caterpillar. What do we do? The difference in interest rates is so large that to get a piece of Caterpillar's pie, we need to bring down our interest rate differential with the local players. To this end, Sany will offer discount interest to high-quality customers, allowing at least 15% to 20% of profits to go out, Mr. Xiao said.

How important is after-sales service to the equipment industry? The answer is, every minute is money. For large equipment like cranes, every day of downtime means huge losses. However, parts of large equipment are often expensive, and users do not prepare spare parts in advance. Once problems occur, they can only turn to the manufacturer's after-sales service. As soon as the after-sales service arrives, the machine will resume production as soon as possible, and the loss will be reduced by one point.

From 2007 to 2009, Sany was only a small brother in the machinery and equipment industry in Brazil, with only two or three customers. However, for these few customers, Sany sent 3 after-sales service personnel from China to the customer's city to track the operation of the equipment in the whole process and follow up any problems. This ratio of service personnel to customers is quite luxurious compared to our overseas markets.

After-sales service is such a customer a customer to do up. Sany subsets the service standard of the international construction machinery industry, not only establishing the world-class call service system, GPS positioning and remote diagnosis system, but also creating the concept of all for the sake of customers, and the nursing mechanism of doctors to care for patients, similar to that of the automobile industry. 6 s shop & throughout; Service models and so on were introduced into the industry. Now sany's after-sales response time in Brazil is about 48 hours, which is quite fast.

On June 8 this year, the governors of The Brazilian state of Mato Grosso and other three states held a meeting in Portovelho, the capital of Rondonia state, and signed a letter of intent to support the initiative of building a railway between the two oceans. Xu Ming said: "WE hope sany products will become a strong competitor for the project with high quality, cost-effective and good service."

In Chile, sany equipment and services were thrust into the media spotlight five years ago during a rescue operation that became famous around the world. A 400-ton crawler crane from Sany was selected by the Chilean government to help rescue 33 miners underground, becoming the only major rescue machine from China. To meet the rescue demand, Sany engineers from China stayed at the rescue site day and night, and sany headquarters chartered a plane to deliver possible parts for the crane.

10 World Cup stadiums have eight trinity equipment construction, use a Sao Paulo business for additional order bought more than 100 sets of trinity equipment, Rio DE janeiro Olympic venues will also appear the figure of the trinity, according to data from trinity excavators earthwork products market share rose to 3% from 6%, while lifting equipment market share is about 40%.

The Chinese and Latin American economies are highly complementary. Latin America is rich in natural resources, while China has mature industrial technology and a sound independent economic system, and its manufacturing capacity is constantly improving. However, many countries in Latin America do not have a complete industrial system, so China can help them establish their own industrial system. "Said Xiang Wenbo, president of Sany Heavy Industry.