Chinese plastics machinery makers need to build their brands to survive competition.
Otherwise, it will be like they're ``selling steel rather than machines,'' said Kaimin Liu of the Dongguan Machinery Association.
As more plastics processors emerge in China, the bright market prospects for machinery have attracted more players. China's market once was dominated by Hong Kong and Taiwan press makers, Liu said. ``But now the mainland companies are catching up.''
According to Liu, in the Dongguan area - one of China's largest plastics production bases - Hong Kong, Taiwan, and mainland-branded presses each take about 30 percent of the market. And the growing number of competitors brings down prices, he said.
``Everyone complains the machinery business is no longer easy,'' Liu said. Some mainland firms, in particular, are trapped by the vicious circle of price cuts, he added.
Unlike the first tier - machines from Japan, North America and Europe - or the second tier - those from Hong Kong and Taiwan - mainland-branded machines tend to play the low-cost card.
``Many small companies have been started by former employees of large companies,'' Liu said, ``and they try to penetrate the market with low prices.''
He advised mainland machine makers to focus more on brand building and, meanwhile, to improve the technical level. ``That's the only way out,'' he said.
Haitian Machinery Co. Ltd., the largest plastics machine maker in China, has set an example of brand building, Liu said.
``Confidence and money are both indispensable in fostering a brand,'' he said. ``You need a reasonable profit margin to ensure continuous investment for product development, high-quality service and the corporate image.
``One advantage of mainland companies is their flexible marketing model,'' said Liu, referring to the common practice of providing a long trial period with little down payment. And China's press buyers have been spoiled by the habit.
``It's not surprising to hear someone running the machines for six months before the payment,'' he said. ``Hong Kong companies seldom do so,'' he added.
