Benefiting from factors such as economic development, fixed asset investment, and the real estate boom, the construction machinery industry was once one of the fastest-growing industries in China. Over the past decade, the construction machinery sector has produced Zoomlion, , Sany Heavy Industry, , XCMG, , LiuGong, , Shantui and other large international enterprises. However, as market saturation gradually increases and the industry is dragged down by production factors such as labor costs, the construction machinery industry is facing the dilemma of “going in reverse,” and many enterprises are seeking transformation and upgrading, beginning to shift to the after-sales service market. The era of the construction machinery aftermarket is quietly opening.

　　New Machine Sales Hit Winter, Aftermarket Begins to Show Promise

　　The construction machinery aftermarket is rich in content, including in-warranty service, maintenance, production and sales of spare parts, used machines, leasing, and remanufacturing. In fact, it is not a new concept; fields such as construction machinery, automobiles, and aircraft abroad have all developed to a certain scale, and in China, since 2007, the term has also frequently appeared at industry summits. “China's construction machinery sales have bid farewell to the era of high-speed growth!” said Yang Yihua, chairman of Qianlima Construction Machinery Group Co., Ltd. After nearly a decade of development, China's construction machinery market is almost saturated, and new machine sales are unlikely to grow substantially; on the contrary, business volumes for maintenance, parts, and other services have increased greatly, and manufacturers and agents have to pay attention to the aftermarket and increase investment. “This is definitely a big cake.” Qi Jun, president of the China Construction Machinery Association, said that as customer demand becomes increasingly diversified, related services will naturally develop rapidly as well.

　　Transformation Still a Long Road, Enterprises Must Face Difficulties Head-On

　　However, the transformation from manufacturer and seller to aftermarket service provider cannot be achieved overnight.

　　Take remanufacturing as an example. First, enterprises still lack technical strength. “Two years ago, we also tried a remanufacturing project, but it was not successful. The reason was that we did not master the core technology, and key components could only be purchased new, making it difficult to reduce costs. The advantages of remanufacturing were hard to demonstrate.” Yang An, deputy general manager of Beijing Tianshun Changcheng Hydraulic Technology Co., Ltd., said that if core components could be independently remanufactured, costs could be reduced by another 20%. “National macro policies have provided major opportunities for the development of remanufacturing, but consumers lack sufficient understanding of it. At the logistics and recycling level, some systems have become bottlenecks restricting the industry, and corresponding market access systems have not yet been established.” Academician Xu Binshi believes that, on the whole, opportunities and challenges coexist, but if the industry wants to develop healthily, it needs to face difficulties head-on and break through these bottlenecks. For enterprises, if they want to make profits in the aftermarket field, they should specifically start from the following four points.

　　Four Strategies to Help Enterprises Win in the Aftermarket

　　1. Attach strategic importance to the aftermarket and change concepts in business philosophy

　　In the first half of 2007, the growth rate of sales in China's construction machinery industry reached 46%, higher than the 32% growth rate of the entire machinery industry. It was expected that annual sales would exceed 226 billion yuan, with a growth rate of about 40%, and industry profits could increase by 70% to 100% year on year. At the current stage, the revenue structure of China's construction machinery market is extremely unbalanced. Compared with mature markets such as the United States and Japan, where the ratio of complete machine sales revenue to aftermarket service revenue is 0.64, China's figure is as high as 3.5, far exceeding the level of mature markets.

　　With the continued development of China's economy and infrastructure showing a sound trend of rapid development, user demand for aftermarket services such as maintenance services, parts supply, leasing, and second-hand equipment is growing stronger. Facing huge development space, the management of construction machinery enterprises should attach strategic importance to the aftermarket, a new field with substantial profits, and promptly seize opportunities, pay attention to innovation in business management, seek fields related to the enterprise's advantages, reasonably plan the development path of the enterprise's aftermarket services, choose the right agents and agency models, and strive to gradually form a comprehensive service system for the construction machinery aftermarket in major cities across the country.

　　2. Develop and introduce new technologies based on the pre-market and expand into new fields

　　The aftermarket of the construction machinery industry is inseparable from the pre-market. Pre-market business provides broad space for the development of the aftermarket; at the same time, the development of the aftermarket will also provide strong after-sales support for the pre-market and can even directly affect sales. In addition to maintaining advantages in the pre-market, construction machinery enterprises must attach importance to the aftermarket, which can actively promote the pre-market and generate considerable economic benefits, and reasonably link the two.

　　Enterprises can develop e-commerce, establish information centers and communication systems, and effectively use computer networks to promote the improvement of the comprehensive service system of the construction machinery aftermarket. On the one hand, they can centralize and effectively use information from numerous construction machinery second-hand markets and leasing markets; on the other hand, they can use remote services to promptly provide help to customers, formulate overall solutions, and maintain interactive contact, enabling both the pre-market and aftermarket of the construction machinery industry to achieve a qualitative leap together.

　　Various branches of the aftermarket can be integrated by relatively large enterprises to use resources reasonably and fully. For example, the establishment of Wuxi Tongbo Leasing Business Port, through the establishment of a second-hand market for leased objects, repurchase, maintenance, remanufacturing, sale, leasing, and the use of guarantee systems, aims to improve and safeguard the exit mechanism for leased objects. Caterpillar's first remanufacturing center in China was established in Shanghai in 2006, aiming to build the largest remanufacturing center in the Asia-Pacific region. It promises to repurchase and refurbish equipment and resell it to users. This practice of establishing a property rights exit mechanism may be an inspiration for domestic construction machinery enterprises.

　　3. Based on cultivating new customers, operate with integrity and improve customer satisfaction

　　For the entire construction machinery industry, the sign of entering the aftermarket era is that the core market shifts from products to services. Joint venture manufacturers and foreign-funded agents have brought advanced service awareness and service concepts to China's construction machinery industry and improved customer satisfaction. Enterprises should adhere to the principle of customer first and use advanced information technology and database resources to carry out customer relationship management. Enterprises need to identify true customers, divide customer groups through customer segmentation and customer value analysis and effectively maintain them, understand changing customer needs, improve customer satisfaction and loyalty, and when necessary strive for enterprise value chain collaboration to promote the common development of the entire industry.

　　Enterprises should regard integrity-based operation as their first principle, set reasonable prices, provide sincere services, and win users' trust. This is the inevitable way to stabilize and maintain customer groups. Construction machinery enterprises should establish corresponding after-sales service systems and models according to their own strength, development stage, business objectives, and sales system. Generally speaking, a sound after-sales service system should include an after-sales service network, technical training system, spare parts supply system, after-sales service evaluation and incentive mechanisms, etc. On the basis of the after-sales service system, enterprises should strengthen the strategic awareness of service first, increase investment in after-sales service, focus on clarifying after-sales service objectives in different periods, enhance the important position of the after-sales service department, and attach importance to after-sales service innovation. The ultimate goal is to improve service strategies and form stable customer segments with development potential that can continuously expand through word of mouth or advertising effects.

　　4. Attach importance to employee quality training

　　Talent resources are an important driving force for the development of modern enterprises, and high-quality technical personnel are the fundamental guarantee for construction machinery enterprises to form core competitiveness.

　　At present, construction machinery enterprises mostly adopt diversified development strategies with multiple varieties, series, and specifications, which places higher demands on the number and quality of employees. Therefore, first, enterprises can strengthen cooperation with various universities to attract and retain talent; second, formulate reasonable talent development plans. On the one hand, they should attach importance to technical training, increase training investment, and improve professional levels; on the other hand, they should focus on improving overall quality, stimulate employees' professionalism, and enhance their sense of responsibility; third, training plans should keep pace with technological progress, while also paying attention to the accumulation and teaching of related skills such as foreign languages, computers, and logistics, with continuous knowledge penetration; fourth, carry out standardized management and establish relevant management systems, standardizing everything from the image of service personnel, maintenance tools, and service vehicles to processes, technical files, maintenance files, and customer files.