On July 20th, Yuan Zheng Technology celebrated its 12th anniversary and guests gathered.
Liu Zhengzhi, the president of Yuan Zheng Science and Technology, is 34 years old and is in his prime, but his eyes are pale. After 12 years of shopping mall infiltration, Liu Zhengzhi graciously answered questions in the media.
"I am convinced that China's private enterprises will rise within the next 5-10 years. This rise does not depend on a large number of low-level processing, but a combination of technology and low cost," commented Liu Zhengzhi.
"Uniform Effect" Triggers Impulse from Private Enterprises
For a long time, Yuan Zheng has been self-reliant as an upstart in the “automotive marketâ€.
The definition of the automotive aftermarket in the industry is “the cost incurred by consumers in the process of using the car.†Specifically, it is the content of repair, maintenance, spare parts, beauty, modification, and oil service. That is, the use and maintenance costs of the car, compared with the cost of the car, the follow-up cost of the car far exceeds the cost of the car.
Before 1995, in the field of vehicle maintenance testing equipment in the automotive aftermarket, the domestic market was completely occupied by international brands such as Bosch (BOSCH) and SNAP-ON of the United States. The Liu Brothers, the founder of Yuan Zheng Technology, entered the field in 1994. It has become the earliest professional technology company that conducts automotive R&D and product manufacturing in diagnostics, testing, and maintenance.
In the automotive aftermarket, the typical characteristic of the Yuan Zheng is that it has been relying on the rapid growth of the technological content, in addition to the special identity of its private enterprises.
Lian Zheng, general manager of the overseas market, said: From 1999 to the present, the annual growth rate of Yuanzheng Technology has exceeded 100%. In 2002, Liu Zhengzhi had publicly announced that the sales of the Yuan Zheng exceeded 150 million Yuan, and the gross profit margin exceeded 60%. Based on the annual growth rate of 100%, the Yuan Zheng’s sales in 2003 have exceeded 300 million.
At present, the sales and service network of Yuanzheng Science and Technology Co., Ltd. has spread over more than 160 countries and regions around the world, forming a relatively complete domestic and international sales network and a complete market service system. Liu Zhengzhi revealed: From a global perspective, in the field of vehicle maintenance and testing equipment, the profits of dealers are maintained at around 10%-15%, and Yuanzheng provides these dealers with more profit, reaching 20%-25%. At the same time, Yuanzheng itself can still maintain sufficient profit margins. The rapid penetration of Yuanzheng products into the market is inseparable from the interests of distributors.
On October 7, 2002, Yuan Zheng Technology was successfully listed on the Hong Kong GEM. In mid-2003, Yuan Zheng, which initially solved the capital problem, acquired two companies from the United Kingdom and Germany. "The purpose of the acquisition is not just their technology. What's more important is to use the channels they already have to expand overseas markets." Ming Ming said.
"The importance of the Yuanzheng's rapid expansion in a short period of time is that it has a cost advantage. Yuanzheng's product costs, including R&D costs, are only 10% of U.S. companies. R&D personnel's salary is only one-fifth that of similar U.S. companies." This is quite a positive experience.
The cost-effective advantages of cheap labor and raw materials in China have enabled Yuanzheng to expand rapidly in the automotive electronics market. The popular sales of Yuanzheng products also began to attract other domestic enterprises to join the field of vehicle maintenance and testing equipment, forming a "strategy." "Effect", Shenzhen Veningda is one of them.
Weining Da did computer maintenance before 1997. At that time, computer maintenance was still a new industry. While operating computer maintenance, Weining Da smelled the secret of the rapid development of the little-known Yuan Zheng, after investigation, the decoder's Profit is much higher than computer maintenance. So in 1997, Weining Da began to transform into a car decoder. After 6 years of hard work, Wei Ningda has already achieved the first brand in the field of car decoders. Its production and sales volume is 1.5 times that of Yuan Zheng, and its sales are over RMB 100 million. .
Yuanzheng declared that its market share of diagnostic computers in the domestic market has reached more than 60%, but Wei Ningda Marketing Department Wang Jun expressed doubts about this figure. "According to the number of Wei Ningda, Yuan Zheng's market share in this field. It should not exceed 20%. In addition to the Yuan Zheng, Jin De, Jin Pentium, Xiu Wang, Dr. Che and other four companies have more than 50% of the market share. In this field, no one can say that it has achieved the first, Because the market has just begun, it is full of variables.".
Industry analysts believe that the success of the Yuan Zheng has triggered the competition of private enterprises in the automotive aftermarket. The huge market space has not only created the Yuan Zheng, but also has achieved the private capital of Weining Da, Chuang Wei Lian, and Golden Pentium in this field. Battle.
In the automotive electronics field, there are approximately 100 billion yuan in global market share. The United States accounts for about 12 billion, Europe 16 billion, Japan 8 billion, China's figure is currently 4 billion, but with developed countries 2% -5% annual growth With different speeds, China's growth rate is about 50%, so the future automotive electronics market is still in China, and competition must occur between private enterprises, because foreign companies do not have a competitive advantage.
Private foreign capital grab 100 billion market
For the rapid development of the domestic automotive electronics industry, Zhong Shi, a senior analyst in the industry, believes that the vast majority of domestic auto manufacturers do not manufacture their own products, but order automotive diagnostic equipment from the outside world. This is because, first, the cost of foreign investment in manufacturing these equipment abroad is not as cheap as in China. Second, if the joint venture automobile manufacturer only produces corresponding electronic products for its own products, the output is certainly not as good as the number of manufacturers that specialize in manufacturing the product. The high cost does not meet the scale efficiency. Professional manufacturers can produce electronic maintenance testing products for various automotive brands. These two factors create business opportunities for the domestic automotive electronics maintenance testing brands.
There are also people in the industry who believe that although there are opportunities, private automotive electronics companies must continue to expand their markets. At present, they face two key issues. The biggest problem is piracy, which is a fatal weakness in the development of domestic automotive computer diagnostic products. “Any manufacturer has developed a diagnostic computer for a certain brand, and other manufacturers will copy it. This is also the core reason why Bosch and other world brands do not want to set up wholly-owned or joint venture factories in China.†Wang Jun pointed out that the current automobile electronics industry in China is the site of injury. .
Followed by technology research and development, because the current rapid development of the auto market, foreign companies, joint ventures, and domestic automakers are introducing new vehicles almost every month. The structure and electronic systems of each vehicle are different. Therefore, computer diagnostic equipment needs to be adjusted accordingly. The development of suitable diagnostic equipment, and currently no domestic companies have such a rapid response to R & D.
Although Bosch and other international giants are reluctant to set up factories in China, automotive electronics is only one of them, which is what economists call "the biggest profit cheese in the automotive industry chain." The larger market comes from car chains. Join the repair shop.
Since 2002, the proportion of private car purchases in China has exceeded 50% for the first time, reaching about 60%. Among them, the proportion of privately-owned cars that are most active in Beijing is already close to 90%. At present, the number of private cars in China has already exceeded 10 million. According to the annual growth rate of 20%, the number of private cars in China will reach 36 million by 2010, and there is much room for franchising.
In addition to car ownership, another figure illustrates the bright future of China's auto repair service industry. According to the analysis of the profits of the world’s top 10 auto companies in the last 10 years according to the “Newsweek†and British “Economist†articles, in a fully mature international automotive market, the sales profit of automobiles accounts for approximately 20% of profits in automobile industry, 20% of parts supply profits, and 60% of profits are generated in its service sector.
In 2003, China's auto production reached 4.444 million. According to statistics from the China Association of Automobile Manufacturers, from January to November 2003, the total industrial output value of the auto industry was 854.908 billion yuan, and total profit was 71.785 billion yuan, a year-on-year increase. 65.4%.
According to the profit of 2:2:6, the total profit of China's auto aftermarket in 2003 should be 215.355 billion yuan. In addition to the 100 billion yuan market in the automotive electronics industry, auto repair services still have a market of over 100 billion yuan.
Foreign capital is so coveted.
In May 2003, Aode Bucks, Japan’s largest car service supply chain, announced that it will formally enter the Chinese automotive service market. Its domestic direct competitor Huang Hat Co., Ltd. also decided that it will be in Shanghai International Automobile City. It opened its first store in China, and the maintenance chain AC Deco, a subsidiary of the US General Motors Group, had already entered China as early as a few years ago, and has already installed bureaus in major cities in China. AC Deco claims that the future Within two to three years, the company will develop more than 200 car repair chain stores in Shanghai and East China and become the leader of East China Automotive Fast Repair.
According to sources related to the Yuan Zheng, the development goal of Yuan Zheng goes far beyond the research and development of automobile diagnostic equipment. From this year onwards, Yuan Zheng will fully intervene in the field of vehicle maintenance services, expand its maintenance chain stores, and rely on chain stores to carry electronics. The model of the product is expanded and it is trying to become the "Chinese Wal-Mart" in the automotive aftermarket.
Unknown to the private market that has just begun to compete, how far can the "Landmark model" go?