The hidden danger behind the used construction machinery market

Second-hand construction machinery The current domestic construction machinery market has exceeded 5 million units. By 2015, the annual sales of construction machinery will reach more than 1 million units. According to the life cycle of mechanical equipment, it is estimated that by 2020, the annual number of scrapped construction machinery will be as high as 1.2 million units.

Although it is generally believed that the overhaul and replacement period of construction machinery is between 5 and 8 years, in the last two years, with the shrinking of the engineering volume and the trade-in operations carried out by various manufacturers, a large number of 2 to 3 years of equipment have also entered the secondary market; Inflows to customers in the industry during 2010, the equipment purchased through mortgages and financing leases will also begin to enter the market in around 2013, and foreign-imported second-hand equipment will also begin to enter the domestic market on a large scale. In the Beijing market alone, there are currently 2,000 new excavator trucks and 4,000 used machineries. According to statistics from the National Equipment Rental and Used Equipment Professional Committee, by the end of 2010, the transaction volume of used equipment for construction machinery in China had exceeded 100 billion yuan, and the transaction volume exceeded an astonishing 5 million units.

Although the number is large, the legitimacy of used products in the market remains to be solved. The sales methods of second-hand construction machinery are generally divided into three types. The first is internal digestion by the dealers' own channels, the second is through the Tianjin, Shenzhen and other two mobile phone distribution markets, and the third is through third parties such as Yiyi and Ritchie Brothers. Platform for auction. The imperfection of used equipment sales channels is one of the key issues affecting the orderly development of the industry. At present, more than 80% of domestic second-hand equipment transactions are private transactions. This situation is really worrying.

In addition, how to determine the qualifications and qualifications of dealers engaged in second-hand products, how to resolve the value-added tax rate of second-hand products, and how to identify the shelf-life of second-hand product recycling, these problems have also become major obstacles to the development of second-hand products of construction machinery.

What is even more worrying is that there is still a lack of perfect two-phone evaluation standards in the country. Users can only make judgments based on the use of machinery and equipment, the overhaul period of the engine and hydraulic pump, and the operating conditions. Not everyone is experienced. Rich practitioners and familiar with machine maintenance and modification knowledge. Therefore, there is no shortage of illegal activities such as fraud.

In the face of the large demand for the secondary market, a second-hand construction machinery trading platform that is characterized by trust, formality, strict supervision, adequate equipment, and more transparency has become an increasingly urgent problem.

Multi-pronged approach to standardization Based on the current confusion in the trading of products in the used equipment market, and the fact that imported equipment is also mixed, the relevant state departments have issued a series of regulations in recent years to regulate them. For example, the "General Rules for Circulation of Used Equipment" was formally implemented on March 1, 2010. The "General Rules" set forth the requirements for the terms, definitions, classifications, quality, appraisal, assessment, evaluation process, and transactions of used equipment circulation.

Up to now, four domestic trade industry standards such as "Second-hand Excavator Circulation Requirements", "Second-hand Loader Circulation Requirements", "Secondary Concrete Pump Circulation Requirements" and "Second-hand Mobile Crane Circulation Requirements" have been formed. Review the manuscript and submit it to the relevant national department for review.

51 domestic trade industry standards such as the use of regional large-scale renewable resource recycling and construction management specifications for second-hand construction machinery have been reviewed by the Ministry of Commerce, including the technical requirements for second-hand forklifts, the technical requirements for second-hand asphalt mixing equipment, and the technical specifications for second-hand asphalt mixing equipment. The rules will be formally implemented on July 1, 2013.

Such frequent introduction of industry standards and regulations is evident in the importance attached to the secondary market for construction machinery. However, based on the various problems exposed in the current secondary market, it is not enough to focus on the healthy and orderly development of the market. For a well-advanced market, there are only laws and regulations that do not work. There should also be relatively perfect quality appraisal agencies and professional practitioners, who should materialize the standards written on paper and regulate the development of the industry with actions.

As early as 2006, China Construction Machinery Industry Association Nanjing Training Base began the training of first-hand second-hand (hydraulic) excavator appraisers in China. Since then, it has created China's first batch of second-hand excavator appraisers, although only 13 people are qualified for evaluation. However, this has given a good start to the assessment of the quality of used construction machinery. There is a large demand for professional second-hand appraisers, and various professional appraisal organizations are increasingly popular.

At the same time, as a third-party evaluation agency, its authority, impartiality, and credibility are also the focus of further standardization; for assessing the industry's market access standards, the accreditation qualification assessment is also the key to improvement.

Balanced development of governance for the future development of the secondary construction machinery market, how to regulate the import of used construction machinery abroad is also a problem to be solved. At present, second-hand products of well-known construction machinery manufacturers represented by countries such as Japan and the United States are flooding into the country, and brands such as Caterpillar, Komatsu, and Kubota are the darlings of second-hand construction machinery auctions.

This has caused a series of problems in China's second-hand construction machinery market to flourish. As early as the 2010 “Two Conferences”, the chairman of the National Committee of the Chinese People's Political Consultative Conference on Zoomlion Long Guojian and the chairman of Sanhe Intelligence He Qinghua submitted to the State Council “a proposal to strongly demand immediate restrictions on the import of second-hand excavators”. The proposal strongly calls for the relevant state departments to strictly limit the import of second-hand excavators from the point of view that used machinery damages the interests of users, disrupts the economic order of the country, and severely restricts the development of the industry.

Subsequently, Zeng Guangan, president of the China Construction Machinery Industry Association's Mining Machinery Branch and president of Liugong, also repeatedly stated at the excavator's annual meeting in 2010 and 2012 that it was necessary to formulate regulations for the management of used equipment imports and establish a unified industry standard. Chairman Liu Xiaohua of Liugong also made it clear that restrictions should be imposed on the import of used construction machinery.

Sanhe Intelligence Chairman He Qinghua once mentioned a data in the “two sessions” in 2012. In 2003, imported excavators accounted for more than 80% of the total excavator sales in the domestic market; in the following two years, this ratio dropped to around 50%. From 2006 to 2008, it was maintained at a level of around 30%; by 2009~2011, this figure was already below 20%; and in 2011, the figure of 14.25% was the lowest in nearly 9 years. This also shows that with the development and growth of China's construction machinery industry, it will seize the opportunity in the market competition.

Although the domestic used machinery market has long been a coveted meat and fat of many domestic and foreign businesses, how to properly guide operations is still at the stage of exploration. Compared with developed countries, there are still differences in the level of development of the secondary construction machinery market in China. The order of circulation is confusing and the quality of equipment is not well protected and after-sales service. However, with the gradual improvement of the second-hand market trading system and the continuous strengthening of the state's supervision of the secondary market, we will surely usher in a more healthy and orderly development of the secondary market for construction machinery.