March 28, 2017
The United States Las Vegas International Construction Machinery Exhibition (hereinafter referred to as CONEXPO-CON/AGG) ended on March 11, 2017. As a leading supplier of bulldozer products in the construction machinery industry, Shantui Corporation used “Come and see your 2017 dozing choices!”as its theme in the Exhibition (Booth No.: G-70113) and made a shocking debut for its four machine models adapted to the North American emission standards after considering feedback from North American customers in the design and manufacture process. Customers from the Middle East, South Africa, Brazil, the United States and other regions were very interested and carried out business negotiations with Shantui salespersons right in the booth. Shantui won unanimous praise from audience and customers on the exhibition and got a great amount of orders.
China Road Machinery Network Reporter Interviewed Zhu Zhi, General Manager of Shantui Import and Export Company
What does the North American market mean for Shantui? What shall Shantui do to enhance its competitiveness and get more market share in the fierce competition environment of North American market? What’s the next development and strategic plan of Shantui in the North American market? With the above questions, reporter from the China Road Machinery Network interviewed Zhu Zhi, General Manager of Shantui Import and Export Company to get the story how Shantui consolidated its position step by step in North American market and how it is gradually accepted by the international mainstream and high-end market.
North America is A High-end, Mature and Huge Market
Shantui has been committed to the development of overseas business in recent years. It has carried out business with customers from more than 150 countries in the world and developed nearly 80 agents. What’s the position of the North American market in Shantui’s many overseas business markets? What does the North American market mean to Shantui? Zhu Zhi, General Manager of Shantui Import and Export Company, said that the North American market is of crucial significance not only to Shantui but also to the entire construction machinery industry of China.
Photo of Fang Jianxian, General Manager of China Road Machinery Network and Zhu Zhi, General Manager of Shantui Import and Export Company
Zhu Zhi said that the importance of the North American market is reflected in two aspects. One is that the capacity of North American market is the largest in the construction machinery industry. For example, capacity of the global market in the bulldozers industry is about 20,000 sets annually, and was about 19,000 sets in 2016, of which more than 8500 sets belonged to the American market, accounting for about 45% of the global market capacity. This shows the great capacity of the American bulldozers market. The other aspect is that North America is a relatively high-end and extremely mature market. It has some local construction machinery manufacturers which are very powerful such as Caterpillar, John Deere, Case, etc., which is a great test for the competitiveness and quality of Shantui’s products, the after-sales service and the operating system when Shantui travels overseas to compete with them. But on the other hand the test will play an important role in promoting quality, product and industrial upgrading of the foreign brands.
Shantui Has More Advantages and Is Determined to Win North American Market
Both local giants such as Caterpillar and John Deere and China's construction machinery companies have targeted at the North American market since it is so important. So how can Shantui enhance its competitiveness and win market share in such a competitive environment?
Photo of Shantui’s Booth on CONEXPO-CON/AGG
Zhu Zhi explained that Shantui mainly endeavored from three aspects to compete for the North American market.
Brand advantage of Shantui in the bulldozer industry is obvious. It’s well known that Shantui is in a dominant position in China's bulldozer market with market share of more than 65% and it owns even higher market share than Carter and Komatsu in some overseas markets. For example, Shantui owns more than 40% of the market share in bulldozers market of Russia. Shantui is also owning highest market shares in bulldozers markets of countries in Africa and Latin America.
Shantui has been actively promoting the upgrading of products. Take the four bulldozers displayed on CONEXPO-CON/AGG for example, three of them are full hydraulic (with 100hp, 130hp and 160hp), their engines all comply with EURO-III and EURO-IV emission standards, and their hydraulic parts such as pump valves all belong to globally well-known brands. Shantui upgraded the engine of the 320hp bulldozer. The gearboxes and hydraulic transmission are optimized with power output curves.
Shantui has been attaching great importance to development of the after-sales service system. In Shantui’s view the after-sales service system should be built and guaranteed before sales of equipment. In the expansion of the North American market, Shantui firstly selected some local agents with proper after-sales service capabilities, and then worked with them together to reserve adequate spare and accessory parts and maintenance and after-sales service personnel to build a complete after-sales service system. Only then did Shantui view it proper to start to sell equipment to customers.
Since its entering the North American market in 2015, Shantui progressed step by step. It achieved single-digit sales in the second half of 2015 and double-digit sales in 2016 and is expected to achieve three-digit sales in 2017. Shantui expects to win 10% of the North American bulldozers market in the next three to five years through cooperation with its agents and development of local network. Targeted and advantaged, Shantui is marching in a well-organized manner on its way to win the North American bulldozer market.
Shantui Is Well Prepared for Deepening Globalization
In addition to pioneering efforts in North America, Shantui is doing the same in other industries around the world, especially in Asia and Africa where Shantui thinks that the greatest competitive pressure are from the Chinese enterprises reflected in the price. It’s well-known that Shantui is a very influential brand in the Chinese market. So for competition in markets of the third world countries, Shantui views itself advantageous in brand reputations, quality and price.
Bulldozer Displayed on CONEXPO-CON/AGG
The globalization strategy of the Company is influenced by many factors such as product, service, channel and fitting ability. As for how Shantui Group paved its way for globalization, Zhu Zhi said all departments and business personnel involved in the entire life cycle of products are quite devoted from the aspect of the entire life cycle of products. For example, Shantui’s products own unique characteristics from the beginning stage of the R&D and to the adaptability of different markets.
For example, Shantui has desert-type products to adapt to desertification areas which are adjusted in design of engine oxygen suction, desert air filtration and dust removing. Shantui also has products to adapt to the cold weather in Russia and in the vast area of northeastern China which has better cold resistance and stability. Besides, Shantui optimized design of details of the products to meet environmental protection requirements and comfort requirements of the driver for high-end markets in North America and the EU.
In addition, Shantui has advanced processes to ensure control of product quality and realization of the original aim of the R&D personnel in the manufacture process. Life cycle of the product includes not only the period from the development of the sales system and the IT system to the after-sales service and to the delivery of products to customers, but also include the recovery of used up products by the Product Re-manufacturing Division where they shall enter markets after re-manufacturing. Re-manufactured products are with better price and their quality are not inferior to new products. y now Shantui has taken effective attempts in remanufacturing with the re-manufactured products successfully entered not only the domestic market but also the international market.
As a model of Chinese enterprises that carried out business overseas successfully, Shantui has a history of more than 30 years. Shantui views three aspects are crucial for enterprises that wish to “go overseas”. The first aspect is product quality, which is the primary condition for “going overseas”. The second is cost-effective and finally after-sales service. Only companies that are successful in the above three aspects can probably success in the “going overseas” process.
Price competition is inevitable in the process of globalization. But it’s still not so fierce in high-end markets in North America. Although North America market is very hot, Shantui is currently the only company that has successfully enter it which enables Shantui the power of pricing. The pricing is based on products of Carter and John Deere whose profit margins are much larger than that of other markets.
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