Traditional hardware tool industry seeks market survival

In the era of planned economy, all industries and industries have a tendency to expand in quantity, but the tool industry has become more prominent. By the end of the 1980s, the basic contingent of more than 100 key enterprises and fixed-point enterprises in the tool industry had formed an annual capacity of 300 million high-speed steel cutters and more than 10 million measuring tools. The number of high-speed steel cutters ranked first in the world. In the recent five years, the price of tools has been lowered repeatedly. Some companies even down 40%-50%, the country's sales have only reached 200 million or so, showing the culprit of excessive production.

What is even more serious is that in the mid to late 1980s, due to the optimistic assessment of the market prospects, key players in China’s tooling have not only expanded themselves, but also cultivated a large number of joint ventures to increase production capacity.

Afterwards, most of these joint ventures were separated from the parent company's independent development. In addition, some state-owned enterprises' employees set up their own factories under the sea and formed the first batch of tools for private and township enterprises in China.

These enterprises are relatively flexible in their mechanisms and do not have the historical burdens of state-owned enterprises. They may have become a new force in the reform and development of the tool industry.

Experts believe that due to various restrictions on talents, technology, equipment, and management levels, many of these companies are still on the verge of expanding their numbers, and intensified. In just 10 years, the total volume soared to 1 billion pieces. The varieties are concentrated on low-end products such as twist drills, construction drills, woodworking tools and calipers. Although the number is large, sales account for only about 30% of the total value of the domestic market. Although due to brand and quality reasons, these products have not entered the formal manufacturing tool sales system at home and abroad, but they have caused a great impact on China's tool export market.

Experts believe that the second major mistake in the development strategy of the hardware and tools industry is the unresponsiveness to the wave of technological innovation and international manufacturing. Did not seize the opportunity to timely upgrade the structure of China's tool products and services.

The overall level of China's tool industry and the gap between foreign countries, after 20 years of reform and opening up, have not been reduced but increased. This is a grim fact that we have to face.