LiuGong is heading towards a century milestone
5 August 2019
LECTURA Press questioned the management of LiuGong Machinery and learnt about the company’s development, long-term goals and main strategies, flagship models or received awards. The interviewed persons were Stacie Adams, Director of Branding and Communications for Guangxi LiuGong Machinery Co. Ltd.; David W. Beatenbough, Vice President of Guangxi Liugong Machinery Co. Ltd.; and Howard Dale, Chairman of LiuGong Europe, Chairman of LiuGong Dressta Machinery and Vice President of Global Sales for Dressta.
Were you satisfied with the construction machinery trade fair bauma 2019? Did it meet your expectations?
Overall, BAUMA 2019 was a great event for both LiuGong and DRESSTA, this year’s exhibition was lively and very positive. We were able to showcase our new models and capture valuable customer insights with the interactive area and the Listening Lab.
With a 3-year cycle BAUMA is the event where our Industry meets to present the latest products and innovations, our high reach demolition excavator and the red dot award winning 4180D grader attracted a lot of interest. We certainly exceeded our expectations thanks to the number of visitors and the quality of conversations we had.
However, these large events cost the companies a lot of money. What is your opinion on future trade fairs and exhibitions in terms of the financial side? Could the companies come up with new presenting strategies or would the trade fairs still play a key role?
Over the years, trade fairs have evolved significantly from a primary show space for products to that of creating an experiential space for customers, trade fairs have come a long way.
I think trade shows such as BAUMA & CONEXPO are here to stay, because they provide a platform for both B2C and B2B. With a 3-year cycle we can align new product launches to coincide with these events and take advantage of having a global audience all under one roof
Last year, the company celebrated the 60th Anniversary. Which milestones would LiuGong like to reach in the following six decades?
In China, the next major milestone is becoming a “Century Old Company” and we are certainly excited for that journey. But in order to get there, we tend to think in shorter time frames so our strategic goals for 2022 are: Top 3 in China, top 10 in the world and to become the Chinese leader and innovator in our industry with sales revenue of 50 billion RMB in 2025.
The company has stabilized on the European market mostly due to the cooperation with Dressta. Moreover, LiuGong recently signed a share purchase agreement to acquire the business operations of Construction Plant & Machinery Sales Limited in the UK. Does it mean that the company now focuses on the EU market? Where would you like to expand?
Since proposed in 2002, globalization has been a long-term strategy and those M&As in Europe are just a one step in our development in Europe and globally. Europe has always been a key market for us and is of a strategic importance to our globalization. It helps us to be closer to the customers and know what they really need. We believe what we learn from this market will help our development in other markets as well.
As I said, the globalization has become one of the company’s key strategies and to drive that LiuGong has established one of the most extensive dealer networks among all Chinese competitors, with more than 300 dealers in over 100 countries. Both our dealers and our products are supported by 10 reginal subsidiaries with sales, marketing and service capabilities and 9 parts deports located strategically to provide fast parts turnaround. R&D is in close collaborations with customers and local markets.
We have more than 1000 engineers spread over four global R&D centres; in the China, UK, Poland, and the US ensuring that our products are adapted to the different needs of various markets and applications from the start. LiuGong also continues to invest in our globalization and now has 3 overseas manufacturing facilities in India, Brazil and Poland.
The company’s flagship has been the wheel loaders. How many units have you sold in total and what model has been the best-selling? Which upgrades can we expect for the upcoming models?
We have been producing wheel loaders since 1958 and in that time, we have produced more than 400,000 units. Our 856/ZL50, which is our 5-ton model and our flagship, is our best-selling model.
We spend a lot of time trying to understand the needs of customers, here in China as well as in markets all over the world. As we learn how customers’ business is changing, we adjust our product plans to lead the way. For example, here in China quarries are moving to larger scale operations, so the trend of production larger wheel loader size is increasing – we are focusing on optimizing our product range in the product size classes larger than the traditional 5-ton class.
Worldwide, the customers are more focused on efficiency than before, so a lot of upgrades will be centred around improving efficiency – more efficient engines, improved hydraulics, more efficient drivelines…all are part of our development plans. Operator comfort is also a key concern all around the world, so we are working on next generation cabs that will be state of the art.
The new cabs will be well insulated with structures optimized for low noise transmission. Visibility is extremely important to wheel loader customers, so we are strategically locating support pillars and other structural parts to maximize visibility all around the machine.
How do you approach the future technologies — electric drives and autonomous driving?
There is no question our industry is changing, and it is changing faster than most of us realize. There is a progression of technologies that are required to implement full autonomous machines, starting with full electronic controls, machine data collection, automated machine cycles, machine guidance and control, remote control machines, and several other building blocks for an autonomous system.
Companies must master all the building block technologies before they can seriously consider an autonomous product. Many companies are doing this, and there is a great deal of work going on that does not show up in current products in the market.
Alternative energy machine technology also moves quickly. Currently, the electric battery is the technology most visible, but there are also significant projects around the world concerning the fuel cell technology and hybrids. At LiuGong we have several alternative energy projects active.
In electric technology, China has a very strong position as there have been huge investments in electric cars and busses. There is a great potential for the experience gained in the automotive and bus industries to transfer to off road equipment.
For our industry, the battery cost is a key. Battery costs for small machines are economically viable today, and battery costs continue to drop making BEVs possible for larger and larger machines.
The 4180D motor grader won prestigious Red Dot Award for product design 2019. Who is the designer and how long did it take to create the design concept? Do you appreciate suchlike awards?
Gary Major, who is our director of Industrial Design, was the lead industrial designer of the 4180D motor grader and his first sketch of the appearance was in 2013! Furthermore, the machine went into production in 2017. So, it lasted about four years from concept to production, but the creation of the design concept was a much shorter process.
The Red Dot and other similar awards are a very big honour for LiuGong. We strive to give our customers the quality they need and demand. Whether in product design, usability or support, having the validation from experts is great.
But having said that, the biggest award we can receive is that from our customers who use our machines every day. Whether from their positive feedback, excitement from operating our machines or repeatable buying habits. Those are the ones that really matter.
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LiuGong (Guangxi LiuGong Machinery Co., Ltd.) is a Chinese construction company with more than 60-year-old history, based in Liuzhou, China. In 1966, LiuGong presented the first modernised Chinese wheel loader. The company counts over 9500 employees, 20 manufacturing facilities and 13 regional parts centres. Moreover, its products are supported by a network of more than 300 dealers in over 100 countries all around the globe. Even though wheel loaders remain the flagship, the company’s wide product portfolio further consists of excavators, dozers, motor graders, rollers, pavers, cold planers, skid steer loaders, backhoes, cranes and aerial work platforms.
Source: LECTURA Verlag GmbH; Patrik Eder