Executive Hire News › Archives › July 2009 › Executive Report : Two channels to market
Executive Report : Two channels to market
Wacker Neuson continues to sell its light equipment directly and its compact plant through a dealer network and remains focused on hire through both channels.
The ‘marriage’ of Wacker and Neuson created a global manufacturer of light and compact equipment that achieved a turnover of €870m in its financial year to December 2008. Light equipment, principally Wacker compaction and concrete finishing machines, continues to be sold direct through the enlarged company’s sales team, whilst compact plant, in the form of Neuson mini excavators and dumpers, is sold through a dealer network.
Andrew Howells, MD of Wacker Neuson Ltd, is “committed to continuing this two channel route to market. We are the No.1 supplier of light equipment to the UK hire industry. By selling direct, we ensure good customer contact and are working successfully with hirers to support their end user customers. We will also continue to develop the compact plant dealer network, which is a strong and established line-up.”
A significant change since the two manufacturers were brought together at the end of 2007 was the re-location of the compact plant assembly plant from Tredegar in south Wales at the end of last year. Originally producing the Powerfab towable micro excavator, later becoming Lifton and Kramer Neuson, Tredegar has been the assembly base for compact plant since the early 1980s. At its peak in 2007, Tredegar assembled in excess of 2,000 dumpers, nearly 70% of which were supplied into the UK market.
Rationale for re-location
“The rationale for re-locating the Wacker Neuson dumper assembly line back to Linz in Austria is simple,” argues Andrew Howells. “All the design, engineering and technical support has always been carried out in Linz. Tredegar was simply bolting together components that had been approved by Linz, with engines and hydraulics that were also shipped from the same source.
“The location of all the technical skills is unchanged in Austria and all compact plant field engineers, and its sales force, are being trained on light equipment machines and will be integrated into the Wacker Neuson team. Over the decades, dumpers have been seen as a peculiarly UK market, but this has changed. In a couple of years, the UK may only account for 50% of dumper sales, so it was important for Wacker Neuson to establish a European distribution base for this growing product range.
“Our UK Head Office in Waltham Cross in Herts holds large stocks of Wacker Neuson compact plant and fast-moving spares and we are committed to further increase the sales of our compact plant line in the UK. In the next few months, we will introduce cab versions of Wacker Neuson dumpers in our 3, 6, 9 and 10 tonne ranges and launch a new hydrostatic 6 tonne machine.
“We have also launched ‘renter’ versions of our mini excavators in the 800kg, 1.5, 2.0 and 2.5 tonne weight class, as well as offering a unique Vertical Digging System for these machines that allows them to operate normally at up to a 150 gradient. We are committed to developing our compact plant range of dumpers and mini excavators for the UK hire market.”
Supply chain challenges
Sales Director Jonathan Vaines is preparing the combined Wacker Neuson business in the UK for the challenges that it will face as, and when, this recession ends. “The key to the future is for our light equipment sales team to continue to partner with hirers. By working with hirers, and visiting end users with them, we have helped them win contracts. To secure future business in a sustainable way, hirers need manufacturers in the supply chain so that we can advise on the most appropriate machine specification, as well as legislation, especially Health & Safety issues. We are now welcome in the supply chain, as hirers have realised that we are not being competitive by visiting their customers. Information flows both ways through the hire partners.
“Similarly, dealers that understand their role in the supply chain will have a future. End user requirements for relevant information from all parties in the supply chain will increase and dealers must be prepared for this. They need to find a way to add value, and become more than just ‘box shifters’. We are confident that both channels to market will serve us well in the years ahead.” •