The transformer market is caught in the quagmire of low-price competition

The transformer industry has grown along with the construction of electric power, and electric power construction is also an infrastructure construction that our country has always attached great importance to. Especially in the past few years, as the country has increased the investment in power construction, the transformer market has been activated, which has enabled China's transformer companies to rapidly expand production capacity and double their output. In recent years, the shortcomings of the rapid expansion of the transformer industry have also gradually revealed. At present, China's transformer market demand is less than 1.5 billion kVA, while our transformer industry's capacity is 3 billion kVA. The transformer industry even ridiculed: China's transformers can already meet the needs of the world.

The most direct impact of excess capacity is the efficiency of the company. The market demand is originally much smaller than the output of the transformer, and if the product of the enterprise is not competitive in the market, if the product cannot be sold, the enterprise will naturally have no benefit. As a result, market competition has become increasingly fierce, and companies have to minimize prices as much as possible. It is pointed out that occupying the market with price advantage is not caused by the enterprise. In the past few years, the State Grid Group purchased the transformer through tendering, and the low bid-winning method was also the main reason for the transformer market to fall into the quagmire of price competition. The depressing of product prices has shrunk the profits of enterprises, and many companies began to cut corners in transformer products and shoddy, in order to recover the profit losses caused by low prices. Therefore, at present, most of the products in the transformer market are of low quality, and more than half of the products are unqualified. As an important equipment for protecting the power grid, transformers, which are caused by vicious market competition, enter the market with low-quality products and will bury time bombs for the safety of our country's power grids.

At present, the State Grid Corporation of China has changed the tendering method that had been used in the past as a low price bid. It is a good way for the transformer industry to alleviate the vicious price competition, but this change alone is obviously not enough. China Transformer Network believes that China’s transformer companies must change their concept of occupying the market with price advantage. With the country’s strong support for wind power and smart grid construction, it is necessary to increase R&D efforts to produce products with higher technological content and better quality. . At the same time, we must take the market demand as the direction and rationally adjust the production structure so as to avoid overcapacity and bring losses to the company.