China's wire and cable industry has continued to struggle in the mid- to low-end market for many years. It not only caused fierce competition and poor quality, but also caused poor profitability. Last year, it also guaranteed a 3%-5% profit margin, but this year it can only achieve 3 %. Even some manufacturing companies in the industry said that they have a 3% profit margin that is already good. Some companies prefer to lose money at a loss. This shows that the domestic cable market competition can be described as fierce.
Since it is clear that the low-end market competition encourages and seems unprofitable, some large-scale enterprises with R&D capabilities and productivity have increased their efforts in R&D and manufacturing of high-end cables. Special cables have also formed in the domestic market. Strong competitiveness.
At present, the sales of special cables account for about 30% of the total sales of the domestic cable market. According to a rough estimate, the annual sales of special cable products in China will be around 40 billion yuan. Especially with the development of China's "land, sea and air", it brings great market space for special cables. Whether it is aerospace or shipbuilding, transportation, electricity, mineral development and other industrial fields, a large number of special cables are required.
However, the blind excitement will inevitably bring about tragic results. For instance, although the development of special cables has significantly improved in China, the external pressures faced are also extremely great. For example, the current global wire and cable industry has clearly fallen into the pattern of several giant monopoly competitions, such as Nexans, Prysmian, General Motors, and LS. They have strong R&D capabilities and are much more concentrated than China, but they The flaw is that the local market is limited, so targeting the Chinese market is inevitable.
At present, the world's leading cable manufacturers have already settled in China, and they have set up many large multinational companies to maximize their market share. In fact, industrial developed countries have a strong technical foundation in these products. Therefore, it is only natural for them to compete for the Chinese market.
These foreign giants entered the Chinese market through various forms such as joint ventures, sole proprietorships and acquisitions. Therefore, we have seen a strange phenomenon. The cable companies that are familiar with the past have changed their names and changed their names overnight. They have become completely foreign and have become completely foreign companies. At present, the major cable companies that foreign companies mainly purchase are special cables and ultra-high voltage power cables, especially special cables. Because the investment is not large, and the technology is high and effective, it has become the main goal of foreign investors.
However, if we say that with the world cable giants entering China, let China's cable manufacturers feel that there is no hope of survival, and the development has no fruit. I think it is not so absolute. In fact, adversity growth tends to be a success. For example, with the entry of multinational giants into China, on the one hand, it has created pressure and challenges on the domestic cable market. On the other hand, it has also provided a major opportunity for discussion and learning.
Especially in the era of rapid development of special cable products, a number of veritable high-tech wire and cable companies will surely emerge. But the premise must be correct. First of all, we must be clear that the real purpose of foreign cable cable companies in the acquisition of cable manufacturing enterprises in China is not to contribute to the Chinese economy, or to develop the business in China, but a bloody fight for and split up China. The cruel war of the market!
If the domestic cable manufacturers cannot work hard and develop forces from management, products, technology, and markets to fight against foreign giants, there are only two possibilities for waiting for China's wire and cable manufacturers. One may be defeated. Closed down; another possibility is to change hands overnight, was acquired by foreign giants, mergers.
For this possibility, we must maintain a sense of anxiety at all times, not to mention the existence of the Ah Q spirit. We believe that foreign giants have entered the Chinese market to prove that the Chinese market has been “aligned with international standards,†and even cleverly adopted the “market-for-technology†strategy. As everyone knows, we will not only lose our market, but will only be able to obtain more fierce market competition instead of superb advanced technology.
From this point of view, why do foreign cable giants come from? The answer is for the market, for profit. The giants did not come to save the Chinese cable market or the national economy, but to carry out a brutal plunder. Under such challenges and pressures, local cable manufacturers must always be vigilant, increase their core competitiveness, increase investment in R&D costs, produce cable products that meet market requirements, and create a national industry!
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