Changing the Perception of Equipment Made in ChinaMon, 10/21/2013 - 15:15
Chinese products have long suffered from a low quality reputation. As the Asian giant develops into one of the world’s leading economies, the manufacturing sector has gradually improved the quality of its products in order to compete in the international market. Nevertheless, bad perceptions of Chinese equipment still haunt the market. LiuGong Machinery, however, has successfully been able to take a share of the construction and mining market because of the quality of its products and the customer service that it offers. “We have to work hard to improve our brand image and prove to our customers that we have the highest possible standards,” explains Dai Wuping, General Manager of LiuGong Machinery Latin America. “We entered the Mexican market in 2007 and the hard work of our team has made our brand very popular in Sonora and Sinaloa. People are now aware of who we are, and old and new customers keep using and buying LiuGong equipment, which is proof of our great support service and reliable equipment.” Holding the ISO 9001 certification is also a testimony of the company’s good performance. When customers know that the company has this certification, their confidence in LiuGong’s products immediately grows, and potential and existing customers know that they can rely on the quality of its products
Wheel loaders are LiuGong’s core products, and the company is the biggest manufacturer of these types of machines in the world, competing with other brands to offer different variations and sizes to the market, from 1 to 6m3. According to Dai, these machines can operate in the toughest environments, with very competitive fuel consumption and productivity compared to rival products in the market.
“Maintenance service is another advantage that LiuGong offers,” adds René Zazueta Alarid, Director General of Ammex, LiuGong’s distribution center in Mexico. “Our product availability is higher because of the fact that we manufacture different products for specific markets.” For example, the wheel loaders available in Mexico are customized to operate in the Latin American market under uniform specifications, and as such are developed to satisfy the local needs. “They may not be as sophisticated as our competitors’ machines, but this also means that our products are sold at a lower price. One example is that the diesel produced in Mexico may not be of the same quality as that which is produced in the US, so the engines distributed in Latin America will be customized according to the kind of fuel that is used in the region. Since there is no need for additives, operational costs are thus reduced,” Zazueta Alarid adds. In case anything does go wrong, the company’s technicians are available 24 hours a day to conduct maintenance on the machines at the customer’s mine site. “This is something that is very important for our customers, since we provide fast solutions for unexpected issues, avoiding downtime in the operations and therefore saving our clients a lot of money,” he says.
An important challenge that LiuGong faces in Mexico is the sale of used machines that are brought in from the US. After being used for two or three years, some machines are sold within the Mexican market for a very low price which, as an alternative and cheaper option for purchasing new equipment represents direct competition for the company. To overcome this challenge, LiuGong has improved its services and maintenance programs; this makes the company more competitive because most used machines are bought from the auction market and thus do not come with additional maintenance or service. “In the end, even though the secondhand machines themselves are very cheap, the companies that buy them at auctions pay a lot of money to buy spare parts,” says Dai. “LiuGong follows up with its distributors to make sure that each machine is taken care of, and if spare parts are needed we supply them in a very short period of time in order to avoid downtime at mines.” In order to fulfill this promise it is essential to have spare parts available. The company requires all of its distributors to have enough stock in their inventories, but it also has the added advantage of being able to ship spare parts from its main facility in Houston within one day: “We also have a distribution network for Latin America with facilities in Brazil, Argentina, Chile and Peru. If any of our customers need spare parts for any of our wheel loaders, we are able to respond from a number of different centers,” emphasizes Dai.
“Our mission in the next five years is to become a top brand in this industry, increasing our market share by at least 10% to 15%. We are also planning to build a manufacturing plant in Mexico that will supply machines for Mexico as well as the American market,” says Dai.