The three major causes of the difficulties of the mechanical and electrical enterprises

The SMEs that support the “half of the country’s GDP” are now suffering. Rising raw materials, lack of market demand, and intensified competition between brands and brands have constantly suppressed the survival space of enterprises. The slightest carelessness in the predicament will fall into an abyss that never ends.

In particular, the recent mad rumors that some small and medium-sized enterprises in Eastern China have closed down in succession, with 30 percent of companies in Wenzhou alone bankrupt. At one time, many small-scale and under-profitable electromechanical “micro-enterprises” became frightened, and they did not know how to seize the key and find out the cracks. Road.

What are the three main reasons why the small and medium-sized hardware and electronic machinery companies are in deep trouble? Based on various analyses, Xiaobian summarizes some points from the industry perspective.

First, financing is difficult, capital chain breaks.

As the country implements a tightening monetary policy, the central bank raises the deposit reserve ratio one after another, the bank is affected by the policy, and based on performance considerations, it does not dare to easily challenge SMEs with high debt ratios and relatively weak credit concepts. In order to allow the normal operation of enterprises, the owners of small and medium-sized enterprises have to seek help from the public to solve the urgent need. However, bankruptcy has become the only choice when private lending has been “ridden with crises”, high borrowing costs, and pressure on companies to survive. Zhejiang Tianshi Electronics Co., Ltd. is an example.

In addition, most small and medium-sized enterprises are private enterprises, and the "triangular debt" phenomenon is very common. In order to win over customers, the company adopts a monthly settlement method with its customers. It is normal for one month or several months to end the first payment. However, as a factory needs production, it needs raw materials, and if the funds are not in place, it will enter a state of negative operation. Once a certain part of the funds is insufficient, the capital chain break becomes inevitable.

Second, competition has intensified and the living space has become narrower.

In China, the hardware and electrical industry because of low barriers to entry, but where in this industry for a few years, the hands have the initial capital to start their own business, this situation, so that SMEs have mushroomed into the hardware and electronic machinery industry, to seize the market. However, as the market continues to change, the lack of demand has exacerbated the increased competition between brands and brands, which has reduced the company's living space.

Congenital stunted small and medium-sized hardware and machinery enterprises, in addition to lack of development funds, fatal point performance in the lack of core competitiveness. It is difficult for enterprises to form differential competition, especially when they cannot withstand the storm. In the difficult environment of 2011, the factories that were forced to suspend production or bankruptcy were the reasons for this.

Third, the strength is weak and the road to transformation is difficult.

Many voices in the industry have said that in order to change the thinking of the company and save the company, the important road to save the company is the transformation of the industry.

Really simple? Transformation is not a slogan. It requires various prerequisites. New products, new technologies, new channels, new partners, new ways of thinking, new funding platforms, etc., need at least three of them to qualify for the transformation and upgrading. The blind transformation is actually the growth.

Many SMEs do long-term support for large companies, do processing, do not have their own technology, no technology and innovation? How to upgrade without innovation?

Hundred businesses flourish with financial prosperity; with stable business, financial stability. Only by stabilizing the development environment for SMEs can China's economy grow rapidly. It is hoped that after this round of turmoil, China's manufacturing industry will be able to smoothly reshuffle and move toward the world's high-end industries.