Machinery Sales Slump? Service and Retrofit as a Fast ASEAN Solution
Chinese competitors are putting European machinery makers in ASEAN under growing price and technology pressure. The fastest response may not be another new machine: machinery service ASEAN, spare parts and retrofit can create revenue sooner. ππππ π©ππ ππͺπ‘π‘ ππ‘π€π π₯π€π¨π© πππ§πβ¦
MARKET & SALES
Machinery Service ASEAN: Why Competitive Pressure Is Rising
New machinery is getting harder to sell in Asia. Yet the installed machine base offers an opportunity: machinery service ASEAN, spare parts and retrofits can generate new revenue with manageable investment and a short time-to-revenue.
European machinery makers in Southeast Asia increasingly face the twin challenge of technologically stronger competitors and intense price pressure.
Chinese manufacturers have long since stopped competing on price alone. They are becoming technologically stronger and increasingly emerging as serious competitors in international markets.
A GTAI interview with the VDMA shows just how fierce price competition has become in some segments: according to member companies, Chinese machines are being offered at one third, or even one fifth of the price of German-made machines. βMade in Germanyβ remains a mark of quality. But from the customerβs perspective, quality alone no longer justifies every price premium.
The conclusion should certainly not be to write off ASEAN.
Your next order may already be standing at the customerβs site
For decades, German and other European manufacturers have installed machinery and equipment across Southeast Asia. This installed machine base, often referred to as the Installed Base, keeps running and needs maintenance, spare parts, repairs, modernisation and, eventually, retrofit.
This is precisely where an opportunity lies that becomes strategically more important when new machine sales weaken.
For many manufacturers, the after-sales business can generate more stable, recurring revenue than a business focused exclusively on new machine sales.
Of particular interest to management: service, spare parts and retrofit can make attractive contributions to earnings while strengthening customer loyalty throughout the machine lifecycle
Service is more than repair. Spare parts, maintenance contracts, modernisation, remote support and retrofit create recurring customer contact. Especially during weaker investment cycles, this business can help stabilise revenue and keep the time-to-revenue of new service offerings short.
The management question is therefore:
Are we already managing our installed machine base in ASEAN consistently as a business in its own right?
The opportunity is clear. But how should it be organised?
Your own service hub: Why Bangkok?
Service assignments from Europe are expensive and often involve longer response times. An independent local service provider usually works for several manufacturers and can rarely offer the same level of product specialisation.
A suitable service hub should be centrally located in ASEAN, offer strong flight connections across the region and provide access to qualified personnel. The workforce should also be able to operate effectively across Southeast Asia and its different business cultures.
Bangkok meets these requirements particularly well.
Setting up a separate company, on the other hand, can be disproportionately complex for only two, three or four service technicians.
The legal framework adds another layer of complexity. Thailandβs Foreign Business Act restricts numerous trading and service activities for foreign-controlled companies. These include, among other activities, sales, engineering, installation, repair and maintenance.
Outsourcing to external technical service providers is often only a partial solution. Their service staff typically work for different manufacturers and therefore cannot always develop the same product-specific depth as a team trained exclusively for one manufacturer.
More importantly, the manufacturer often loses direct contact with the operators of its own machines and with its valuable insight into service requirements, modernisation needs and future investment plans.
A third option: Your own service team without your own company
This is where a dedicated service unit within an established Thai organisation can become an attractive option.
With a Sanet Business Unit, for example, employees work exclusively with one manufacturerβs products. They can be technically trained and professionally managed by the European headquarters. Sanet provides market advice and handles the organisational framework, employer responsibilities, administration and infrastructure.
Costs remain predictable within an agreed budget.
International machinery manufacturers have been using this Sanet Group model for more than ten years. Once the agreement is in place and the right employees have been recruited, the unit can be launched comparatively quickly.
Sanet can also support the recruitment of suitable technical staff when required. The model is therefore relevant not only to companies without their own local entity.
After all, a sales company is not automatically a professional after-sales organisation. A dedicated service team can complement an existing structure.
Service needs spare parts: availability is essential for effective after-sales
A technician on the ground is of little help if the crucial spare part still has to be flown in from Europe.
With Business Unit Plus, Sanet can additionally handle imports, customs clearance, warehousing, delivery and local invoicing. Pricing and sales policy remain with the manufacturer. Sanet does not work with a traditional trading margin, but with a fixed service fee.
With its central location and extensive flight connections across Southeast Asia, Bangkok can serve as the base for a regional service concept.
Perhaps the next ASEAN order is not for a new machine at all. Perhaps it has been standing at the customerβs site for years.
Would you like to expand your service business in ASEAN quickly or establish your own product-specific service team without setting up another company?
Talk to Sanet about the available models. Contact us here
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