Analysis On The Development Of Second Hand Excavator Market In China

In recent years, investment in highway, railway, water conservancy, housing and other infrastructure construction continues to increase, which directly stimulates the demand for construction machinery, and the rapid development of the market as the main construction machinery excavator. At the same time, the second-hand excavator with cheap prices, cost-effective advantages are gradually growing rapidly by users and sales. With the rapid development of the second-hand excavator market, it also exposes that the laws and regulations of the second-hand excavator industry are not perfect, and the imperfect tax system and evaluation standards are not uniform. This paper will analyze the second-hand excavator market in China from three aspects: the current situation, the existing problems and the future development direction.            

Foreign brands occupy most of the second-hand excavator market share in China. At present, foreign brands are basically foreign brands, such as Komatsu, Hitachi, Caterpillar, especially Komatsu, Hitachi. The plot is that the second-hand excavator market of Chinese brands has a greater impact. The main reason is that Japan is the world's largest exporter, using mobile phones. A stable source has been formed, and China's huge suppliers use products, in most cases, from Japan to China. According to the source of second-hand excavators, we can divide them into the following four categories: 1. Imported second-hand excavators, mainly Japanese brands, such as Komatsu, Hitachi, 2. Used for second-hand excavators through one or more markets, basically through the private trade circulation second-hand excavator market; 3. Transferred by leasing companies; Second-hand excavators, mainly used for 3 to 5 years; 4, after renovation of second-hand excavators, excavator manufacturers, distributors or renovated second-hand excavators in renovation plants. In addition, there are many low-quality assembly equipment also occupy a certain market share. This equipment is usually a private business. The quality and performance of the equipment is poor. Generally, after minor improvement or repair, some people even assemble with abandoned equipment. Deng Baishi Group Automobile Research understands that at present, China mainly imports second-hand excavators and private transactions, these two types of equipment second-hand excavators account for more than 80% of the total; while China's operating leasing companies have not formed a certain scale, which has little impact on the second-hand excavator market. It is worth noting that in the past two years abroad, domestic excavator manufacturers and distributors have renovated their use, and remanufacturing business has developed rapidly, which is likely to become one of the important sources of mobile phone use in China in the future. As we all know, excavator brand can be divided into four types: Europe and the United States, Japan, Korea and domestic industries. Caterpillar is the representative brand of Europe and the United States. Caterpillar remanufacturing plant was put into operation in Shanghai in 2006, and then in 2009 Caterpillar and Yuchai Engine remanufacturing business cooperation. Secondly, Volvo set up the first authorized second-hand equipment maintenance center in China in 2011. Japan is a renovated second-hand excavator, and the remanufacturing business has accumulated rich experience, forming a standardized second-hand excavator renovation, remanufacturing business operation process. After 2000, Komatsu and Hitachi will renovate the mature Japanese used excavators and re-manufacture business model into China to promote the development of China's second-hand excavator market. Following is the flow chart of recycling, renovation and remanufacturing of second-hand excavators in Japan.            

The related system is not perfect. The biggest used excavator market in China has developed for more than ten years. Although it has a certain market scale, the second-hand excavator market in China is immature and stable. It is still at an early stage. There are many problems in the management of the second-hand excavator market. First, there is a lack of perfection. Laws and regulations to regulate and regulate the second-hand excavator market in China. Although in recent years, the state has issued some policies and regulations on second-hand machinery, but did not form a complete, standardized system, there are many legal gaps, such as the current market exists in the sale of second-hand excavators should be abolished, there are gaps in the management of private transaction tax and so on. Second, the state has not yet formulated a unified tax system. In the second-hand equipment transactions, the implementation of local tax policies is basically the basis. Some VAT taxes, according to business tax, are the highest 17%, the lowest 2%, the height is poor, the tax standards are not uniform and the key factors restricting the development of the market. Recycling used machines with manufacturers or distributors often faces a customer who cannot invoice, which will also increase the operating costs of manufacturers or distributors. Again, there is no unified evaluation system for second-hand excavators. Although the manufacturers of construction machinery have their own independent evaluation criteria for second-hand excavators, they have not yet formed a unified scientific evaluation criteria. The manufacturers or distributors of second-hand construction machinery and construction machinery lack scientific basis in actual evaluation and are more arbitrary. Due to the lack of standardization of relevant national standards, but also make the buyer and seller of second-hand excavator product certification, which affects the transaction order of second-hand excavator clear. Finally, the cost of production is relatively high, and the enterprise basically maintains a small profit. There are two main reasons for this situation: on the one hand, it is not enough for China's construction machinery industry to maintain the value of equipment. Especially, the Chinese excavators are mainly personal users, the user's excavators have less maintenance costs, the parts of excavators are damaged seriously after recovery, and the cost of reconstruction and production is higher on the basis of recovery. On the other hand, the excavator users of second-hand excavators in China have not yet formed a correct conceptual understanding. They believe that the price of second-hand equipment is cheap, the transaction price of remanufactured excavators after decoration is not high, and the profit margin is small. In addition, the state does not have tax incentives, the renovation and remanufacturing business can only maintain a small profit, or even a loss.

Scale, youth and standardization are the future development direction of China's largest second-hand excavator market development characteristics are large-scale. After ten years of rapid development, China has become the world's largest excavator market. In the future, there will be more second-hand excavator market in use time. China will become the world's largest second-hand excavator market. At the same time, the structure of China's excavator market will change: the excavator market in developed coastal areas will gradually be saturated, the sales of new cars will gradually decline in the future, and the proportion of used excavators will gradually increase due to their advantages; with the increase of state investment in the construction of the central and Western regions, the focus of excavator market will begin to shift to the central and Western regions. Because there will be a large number of second-hand excavators in the central and western regions in the future, the sales of new cars in the central and western regions will have a certain impact, and the model will be formed in the central and western regions and the market competition of new car second-hand excavators. The future of second-hand excavator products will be in the direction of tsunami development. In recent years, China's construction machinery leasing industry has developed rapidly. In addition to third-party leasing companies, more and more manufacturers and distributors have launched leasing business. Third-party leasing companies or manufacturers, distributors, in order to improve the comprehensive profitability of equipment, the value of the two export channels of second-hand equipment, usually in 3-5 years leasing equipment updates will be sold to the second-hand market, personal users will use equipment for pre-market reform. But in recent years, because of the unstable economy, there is a commercial risk again, equipment updating time is gradually shortened, a large number of 2-3 years equipment also began to flow in the market, the second-hand excavator market product tsunami will gradually emerge. Finally, China's second-hand construction machinery is the direction of standardization, and gradually matures. In 2009, the National Equipment Leasing and Second-hand Equipment Professional Committee and the circulation of second-hand equipment completed the general principles and approval of technical specifications standards. On March 1, 2010, it was formally promulgated. In September 2010, second-hand excavators, loaders and concrete began. Drafting technical standards for four cycles of pumping trucks and cranes. In the future, China's market will be used for laws and regulations, tax system, continuous development and improvement of the evaluation system, etc.