LiuGong Gears Up to Take on U.S. Construction Equipment Market
As supply-chain problems tighten construction equipment availability, LiuGong North America in Katy, Texas, says it has a compelling message to customers and potential dealers:
We’re here, we’re growing, and in some cases, we have inventory.
Earlier this year, LiuGong detailed a major revamp of its offerings to U.S. customers, including a transition from the E-series to the F-series excavators, a new line of Dressta dozers scheduled to debut in the second half of 2022 and the introduction of new wheel loaders over the next 24 months. This fall, the company had select models including its new F-series compact excavators displayed at both the Utility Expo and the ARA Show.
During the shows, Equipment World sat down with the LiuGong executive team to catch up.
With most of its products manufactured in China, LiuGong is seeing the supply constraints impacting the construction equipment industry. “I’ve not seen anything like this in 29 years of being in the industry,” says Kevin Thieneman, executive chairman and vice president. “We have to choose what we ship from month to month because you can’t get space on ships.”
Still, because China recovered earlier from the pandemic’s impacts and because more Chinese production is now directed overseas as domestic demand lessens, LiuGong North America finds itself in a better position than some of its competitors. It has inventory for sell, albeit much of it spoken for when it comes off a ship.
Take, for instance, LiuGong’s new F-series compact excavators, which LiuGong has limited inventory. “Availability equals retail at this point,” says Chris Saucedo, vice president and general manager, construction equipment, “and so just about everything that’s coming off the boat is already spoken for, and our dealers are working with each other to fill needs and get more business.”
Dealers, dealers, dealers
The green areas in this map indicate locations that LiuGong North America is targeting for dealer acquisition. (As of September, 2021; Alpha & Omega in Texas has since signed on.)LiuGong North America
Job number one for LiuGong North America is to strengthen its dealer network, says incoming president Andrew Ryan. “We have representation in about a third of the most important North American markets. We want to rapidly increase our representation, not by adding just numbers of dealers but by adding quality dealers that believe in our brand story.”
LiuGong is specifically looking for dealers in the Southeast, Pennsylvania and the central Midwest, among others. (See map above.)
“We don’t have any hard and fast rules about working with LiuGong at the expense of working with others,” Ryan says. Multiline dealers, he says, have an existing infrastructure that allows the company to build incremental relationships. “When you’re in a multiline dealer environment and that dealer is deciding to make an inventory investment with us or a competitive brand, that sharpens you.”
LiuGong’s vision here is to become a full-line OEM. Potential U.S. products waiting in the wings in the company’s plants in China include motor graders, compactors and backhoes. (LiuGong already sells Tier 3 versions of several products in Mexico.)
Another thrust for Ryan is to grow LiuGong North America’s aggregates business. “We’re asking our dealers to be prepared for expansion of our line into larger products over the next three to five years, specifically wheel loaders and excavators and, eventually, 100-ton rigid-frame haul trucks,” he says.
“Quarry and aggregates have been a great success for us,” Thieneman says, who also points out that KHL’s Yellow Table now ranks the global company as the 15th largest construction equipment manufacturer in the world, with more than $4 billion in sales revenues in 2020.
Another thrust is rental. The company has about 30 distributors, and about half of them are in the rent-to-sell space with a few in rent-to-rent. “It’s likely we will complement our dealers’ rent-to-sell strategy with certain regional account customers,” Ryan says. “We can be a very good supplier to a midsize regional rental company.” And in areas where there is no current dealer coverage, “there will be big opportunities for us to form relationships with rental companies, and perhaps see them choose to represent us as a dealer over time.”
Ryan is also working on building the North American team. “We want to make sure they feel empowered and entrepreneurial,” he says. “It’s a very different environment in this startup space than it would be with one of our more mature competitors. This is a see-a-problem-solve-a-problem kind of place.”
LiuGong also wants its dealers to know the brand’s clear expectations of product support. “You have to have buyer confidence that you’re going to be there long term after the sale,” Ryan says. “You’ve got the parts stocked, the technicians and the service infrastructure to keep customers running and productive.”
Head-to-head with the big guys
LiuGong’s 835 wheel loaderLiuGong North America
For those who hesitate to buy a Chinese-made machine, Thieneman points out that LiuGong produces global equipment. It uses Cummins engines and ZF transmissions. “When you break it down that way, it then becomes a question of dealer support.”
Moreover, the company will put its compact excavators “head-to-head with the big guys,” Saucedo says. “The product is very strong.” The 1.8-metric-ton 9018F and 2.7-metric-ton 9027F started arriving earlier this year. LiuGong will also introduce two additional models, the 4.5- and 5.5-tonne units, that will round out the F-series line, says Saucedo. The full-size excavator offering is now in transition, with the last E-series machine sold in September. The F-series full-size excavators will appear early next year.
Although LiuGong expected its revamped Dressta dozers to first make their appearance this fall, that schedule has been pushed back to Q2 next year. It now has five machines in a test program here.
Ryan comes to LiuGong after 25 years at Caterpillar where he worked on Cat’s expansion into the rental and compact equipment segments, along with working with dealers and in aftermarket parts. After a two-year stint in financial technology, Ryan returned to construction, signing on with LiuGong in late summer.
“We have that startup energy and the excitement of creation combined with the experience and financial capacity of a global brand,” Ryan says of LiuGong.