LiuGong Machinery Corp. is seeing robust growth in Europe as it continues expansion on the continent, executives announced at INTERMAT.
China’s premier construction equipment manufacturer has been significantly increasing its commitment to the European market during the past year. LiuGong has sown the seeds for growth in the manufacturing, product, distribution, finance and service segments of its business, all aimed at harvesting greater penetration in the market.
“The events, expansions and successes of the past year point to the importance of the European market for LiuGong,” says Zeng Guang’an, Vice-Chairman and President of LiuGong. “LiuGong is a well-rounded company with full-line service, and a full-line of products. We are committed to fully participating in this market, from production to distribution to sales and service.”
The company is doubling the size of its parts depot in Europe. LiuGong rolled out a new finance program tailored for Europe last December. It has begun retooling its newly acquired plant in Poland to begin production on excavators. The company has doubled the size of its dealer network. Sales results show that the plans are taking root. At INTERMAT 2012, LiuGong announced it posted record sales in 2011 in Europe.
LiuGong serves its growing distribution network with 10 global subsidiary headquarter offices and parts depots to insure ready and quick access to replacement parts. During the first quarter of 2012, LiuGong consolidated its parts depot and headquarters offices in The Netherlands, moving the depot to Almere, next to the headquarters offices there. The depot has grown from 1,110 square meters in its previous location to 2,400 square meters and has been upgraded. The warehouse is managed by a computerized system and the parts ordering is done online, improving the speed of transactions and parts fill rates. The warehouse will carry more than 14,000 items supporting all machines sold in Europe, for a total inventory value of €3 million.
After finalizing its agreement to acquire the construction machinery production and patents from HSW (Huta Stalowa Wola) Dressta in January, LiuGong has begun retooling the plant in Stalowa Wola, Poland. The work includes installation of a new excavator assembly line and additional plant cranes, development of sub-assembly feeder lines and modifications to paint lines. Racking and shelving for parts will be installed as well. Future plans include adding tooling and fixtures for the manufacturing of excavator components.
LiuGong leaders say the first excavators built at the plant may roll off the line as early as May of this year. In the meantime, LiuGong is pressing forward with its technology exchange program. Chinese managers are on the ground in Stalowa Wola, while quality control and welding experts have travelled to China to work in LiuGong’s Tianjin factory.
Along with its plant in central Europe producing machines tailored to Western demands, LiuGong will also gain access to important distribution corridors and a logistical advantage that decreases shipping costs and increases the speed to market.
That market is growing for the company as well. In the past year, LiuGong has signed 11 new European dealers, doubling its network to 22.
To support this growing network, LiuGong in the past year has expanded its support through a series of extensive, 11-day training courses offered by LiuGong Europe to its dealers and customers. The training is part of LiuGong’s global effort to increase technical knowledge and skill across LiuGong’s dealer network and among customers and will be offered again this year.
Last December, LiuGong selected France-based BNP PARIBAS Lease Group S.A. as its financing partner in a program administered by BNP PARIBAS Leasing Solutions. BNP Paribas Leasing Solutions specializes in financing for professional construction equipment. It offers financial options from lease financing to outsourcing, and includes flexible and long-term leasing. So far, 14 machines have been sold through the program.
These efforts have begun to yield results and have supported LiuGong’s success in sales. In 2011, LiuGong increased sales in the European Union and Russia by 174%, from 457 units sold in 2010 to 1,253 units sold in 2011.
“We have all the right things in place to see LiuGong thrive in Europe,” says Zeng. “We’re looking forward to continued growth as customers discover what a great value our products provide.”