| Chengdu Kaiwei Iternal-combustion Engine Co.Ltd is a joint venture co-organised by Chengdu General Iternal-combustion Engine Factory and American TLi International Trust Investment Group in 1994. It mainly produces and develops agricultural vehicles and diesel engines, the accessories to light-vehicles. Its diesel engines range from Series490, Series493 to Series 4100,etc. The Internal-combustion engine market has already marched into the normal stage of its development after the rapid expanding at the beginning. There are more than 300 main engine plants and more than 2,000 ones for fittings. The total output of Internal-combustion engines in China takes up 15.7% of the ones in the world. However, quite a few of series have suffered overproduction because of low-level and repetitive construction. The products of most enterprises have been marked down by 30%-50%. Many of the enterprises fell into loss and so did Chengdu Kaiwei Internal-combustion Engine Co.,Ltd. The company ran from bad to worse. Its surplus reduced sharply from 52.97million in 1993 to 14.43millions in 1994 and 15.31millions in 1995. In 1996, the loss happened and amounted to more than 4millions.The market within our province shrinks from all aspects. There is no clear market composition out of our province, too. Through the investigation of the working conditions of the enterprises and their trade, we can analyse the main reasons as the following:Firstly, the whole requirement for agricultural vehicles is affected by the siege economy policy of retrenchment, which results in the lump benefits' getting down of the whole trade of Internal-combustion engines. The profit made in 1997 reduced by 55.8% compared with that in 1996.Secondly, the local producing capacity of agricultural vehicles in such places as Shandong and Hunan has exceeded that in Sichuan one by one. This change of marketing situation leads to the sales reduction in the company's former regional market in these provinces.Thirdly, the development of light vehicles and the vehicle market is not booming, and thus affects the company's selling in such subdivided market. Fourthly, the company loses parts of its former clients because of its partial inferior products. Fifthly, outer enterprises march into Sichuan on a large scale, they race to control the market and make Kaiwei Co.,Ltd lose parts of it. Sixthly, the slack internal management leads to the higher costs of the product inferior competitiveness. Seventhly, the weak product developing, the insufficient all-around development, the small amount of investments makes the products unable to meet the needs of the market.Lastly, the unsound decision-making and the large internal consumption also make the company unable to fit in with the needs of the market and at lose lost many opportunities. With the declination in sales income, the profit gets down as well. But the fixed fee financed by the company remains, and is even likely to go up. All this increases the company's losses.The loss as from January to August in 1997 amounted to 17.61 million. The serious shortage of funds affects its operation. The company tried to take some measures but gained little. The development of Kaiwei Co.,Ltd, considering both its trade at present and the latest working and financial situations, should be reformed as the following to get away from its loss earlier:Firstly, they must adjust the market structure, strengthen the development for the big market via viewing the market trend and abandon or shrink the small one.Secondly, they must adjust the product structure, adjusting or reforming their former products both in quality and function. Thirdly, they must develop some new products and foster a new market.Fifthly, they must strengthen the internal management, reducing consumption and reform the personnel policy.Sixthly, they must increase capital operation, introduce funds and restart the assets.There are many advantages in Kaiwei Co.,Ltd. Only if the administrative personnel and the... |
PDF Full Text Request