Since the beginning of this year, many construction machinery companies have felt the cooling of the market:
Caterpillar's sales volume in the first quarter of 2024 declined, but sales revenue was flat compared to the first quarter of 2023 due to higher prices.
Komatsu and Hitachi Construction Machinery's sales and operating profit in the first quarter of 2024 will be lower than the same period last year, Komatsu expects the global construction machinery demand as of March 25 to be 5%~10% lower than the previous period, and Hitachi Construction Machinery expects its demand to also decrease by 5%;
Volvo CE sales in the first quarter of this year either declined or remained stable in all regions where it operated. The manufacturer said the result was in line with the expected market downturn, with global demand being weak compared to strong sales in the same period last year.
In the face of the foreseeable market decline, industry giants continue to increase the layout of the aftermarket.
Strengthen after-sales business
Kobelco Construction Machinery established a new after-sales service headquarters
Recently, Kobelco Construction Machinery announced that it will set up an after-sales division. Kobelco Construction Machinery believes that due to the shortage of professional service personnel and the lengthening of the replacement cycle of new machines (due to performance improvements), customers' demand for after-sales and rapid response services is increasing.
"So far, we've differentiated ourselves through product development and volume growth, but we need to change that mindset." Hideki Kinukawa, director and executive officer of Kobelco Construction Machinery, who has been appointed head of the aftermarket department, stressed that the company must move away from the focus on new car sales for the following reasons: as the technological level of each company increases, even if an innovative excavator is introduced to the market, a competitor's model will appear in a short period of time, forcing the company to compete on price, and the natural profitability will decline. This trend is further exacerbated by the increase in the price of new excavators due to high prices for parts and materials. "Due to the higher cost of acquisition for the user, the user is increasingly inclined to use the construction equipment for a longer period of time (e.g. 12 years) rather than replacing it after 10 years".
Volvo CE unveils a new service contract
In 2024, Volvo CE will issue a service contract in gold, silver and blue to provide repair and maintenance services for its products.
For customers, a Volvo service contract means that maintenance of equipment can be entrusted to a Volvo dealer, allowing the customer to focus on their core business. In addition, fixed maintenance and repair costs help customers to manage their budgets and costs more accurately, allowing them to choose the right package according to the needs and budget of the equipment operation.
Japanese construction machinery companies are strengthening their after-sales business
Japanese industrial media reported that Japanese construction machinery companies are strengthening after-sales business, including parts replacement and maintenance. Komatsu, Hitachi Construction Machinery, and Sumitomo Construction Machinery are also using their own proprietary vehicle operation information collection systems and are achieving results. Aftermarket sales are small in the short term compared to new vehicle sales, but profit margins are high, and companies are focusing on developing this market as a "treasure market" that is expected to contribute to profits.
Drive second-hand business
Liebherr launches the Used Equipment Portal
The manufacturer Liebherr is launching a new portal dedicated to the sale of used machines, covering the sale of used mining, earthmoving and material handling machinery, mobile and crawler cranes, tower cranes, offshore cranes, concrete technology and the corresponding used accessories and spare parts.
Daniel Hecker, Business Development Sales, Liebherr-emtec GmbH, said: "With the reopening of the market, we will provide a central platform for the global used equipment business. Customers will be able to independently search for their desired used equipment on our virtual marketplace, while our sales partners will register and manage their used equipment through the platform and its associated applications. ”
According to Liebherr, buying used machines is cheaper, faster and more sustainable. The main advantage for users in the used equipment market is that the platform is user-friendly. Many new features help potential buyers find the ideal machine faster, such as full-text search and filtering capabilities specific to the machine and application area. Customers will be able to create their own personal watchlists with their favorite products.
Expansion of direct leasing business
In recent years, leasing has gradually become a mainstream way of using equipment, and many construction machinery and equipment manufacturers have participated in the leasing business in a direct or indirect way in order to meet the needs of users.
Hitachi Construction Machinery will promote direct leasing business in Europe
Hitachi Construction Machinery is one of the earliest multinational companies in China's construction machinery industry to explore the leasing market, and the equipment leasing business in China and even Asia is developing rapidly. Hitachi Construction Machinery Europe (HCME) has announced that it will begin leasing equipment directly to end users under its own brand in parts of Europe.
Andre De Boer, general manager of rental and used equipment at Hitachi Construction Machinery Europe, said the company will open "retail leased" warehouses in the Netherlands, the United Kingdom and France. The rental business in the Netherlands will be the first to open and will be considered as a pilot market, before more warehouses are rolled out in the UK and France. It only offers short-term rentals (under six months), and existing dealers still have ownership of long-term leases under a premium rental program introduced in Europe in 2018.
Under the existing premium rental program, Hitachi excavators and wheel loaders can be leased directly from the company's dealer network.
Hitachi buys these machines and then leases them to end users by its dealers, who perform maintenance and repairs on the machines during the rental period. Hitachi also offers leasing services in the UK through Synergy Hire, a company acquired in 2019.
The Company also provides leasing business to some of the largest equipment rental companies in Europe. De Boer said some people reacted that the new model should act as an "extension of the market" rather than a "direct competitor".