21 April 2015, 00:00
LiuGong, the premier Chinese construction manufacturer, has adjusted its strategies to challenge a seemingly ‘new normality’ in the construction machinery industry.
Slow recovery from the global economic recession means that the construction machinery industry has contracted for a third successive year. Intense regional political and economic situations, low demand for resources, a decrease in emerging economies and conservative investment have all led to a sharp decrease in the demand for heavy machinery. Alongside this, the industry itself has become oversaturated both in terms of excessive production and intensive competition.
LiuGong – led by a new generation of experienced management personnel – is proceeding with a refined initiative programme to overcome the difficulties the industry has faced. Its growth is underpinned by a global vision and long-term strategy, helping the manufacturer to adapt to an unprecedented industry restructure.
Superior Product Quality
Product quality is key to success in the open market. By committing considerable resources to machine excellence and customer service, LiuGong has ensured it remains competitive. Its comprehensive machine catalogue comprises 15 product lines: wheel loaders, excavators, bulldozers, motor graders, pavers, cold planers, skid steers, backhoe loaders, rollers, forklifts, truck mounted cranes, crawler cranes, pipe layers, mining dump trucks and concrete equipment.
Its machines are produced through a Six Sigma manufacturing methodology, and are built to be in full compliance with ISO 9000 standards.
Strengthening R&D Capability
The company is committed to technical innovation and continually invests in its research and development: each machine’s DNA is built from the work of over 1000 experienced and dedicated engineers working in three world-class R&D centres across the world.
These facilities will soon benefit from the opening of the Global Research and Development Centre in Liuzhou, China. This new hub of LiuGong R&D, set to become operational in June, 2015, is a project that has been ongoing since its initial conception in 2013. The world-class facility – complete with state-of-the-art testing grounds, laboratories, office space and studios – will elevate LiuGong’s R&D to a level comparable with the most established global construction equipment manufacturers, and enhance the technological proficiency in its machines.
In addition, LiuGong is constantly looking to recruit the most talented and best-qualified engineers from around the world to develop its customer-focused products.
Global Approach
LiuGong is becoming an increasingly global company, establishing subsidiary offices and performing mergers and acquisitions in key regional markets. The company has built a strong sales and support network, including 24 manufacturing plants, among which three are located overseas in India, Poland and Brazil; 10 are subsidiary companies with headquarters in India, USA, Netherlands, Dubai, South Africa, Brazil, Poland, Russia and Hong Kong; and eight are statically combined with depots to ensure the fast turnaround of parts, distribution and service.
LiuGong supports its global sales channels with a substantial dealer network. 374 dealers are situated across six continents in over 136 countries, and extend out to more than 2650 sales outlets around the world.
By continually expanding its ties in new and emerging markets – as well as capitalising on the huge economic potential in its domestic China – LiuGong will rapidly accelerate the distribution of its machines and brand values worldwide.
Strong Alliances
LiuGong places a strong emphasis on creating value through cooperation. That is why it develops relationships with partners who share the same philosophy of delivering technical excellence to customers across the world. These partnerships are focused on the machines’ core technologies and major components. For example, the company has key collaborations with renowned organisations such as Cummins and ZF, allowing LiuGong to produce tailored, technologically advanced engines and axles for its machines.
The results of these collaborations are now used frequently across LiuGong’s product lines, including the new E-Series excavators and H-Series wheel loaders.
The Value Chain
The development of technology and its global integration have optimised LiuGong’s value chain, helping the manufacturer to remain profitable during challenging economic times. But the company is not just focused on building the machines and distributing them worldwide: the business’ ancillary services have developed considerably throughout its expansion, for example financing support, after-sales service, efficient parts distribution and, when necessary, machine remanufacturing at the customers’ request.
The Next Steps
As part of its restructure ahead of the Global Research and Development Centre opening in June, 2015, LiuGong has had to react quickly to extenuating economic circumstances that have threatened efficiency. Bulldozer production was moved to the Changzou Plant to optimise its production, and the paver business and components plants had to be concentrated to run more efficiently.
Once the Development Centre is operational, the next steps for LiuGong will relate to the human element and financial efficiency of the organisation. Human resources will undergo a reformation, and a performance and incentive systems will be reformed to stimulate employees’ enthusiasm and creative potential. Simultaneously, LiuGong will look to cut down internal expenses and strategise how to reduce the external financial risks that impact the company’s profitability.
Strengthen Brand Awareness
In March, 2014, LiuGong launched a new brand strategy for the global market. With the guidance of this strategy, LiuGong will work together with its subsidiaries and dealers to ensure a unified voice and create brand consistency throughout the world.
“56 years in the construction manufacturing industry have helped to prove our abilities in adapting to the continual transformation of the economic climate,” summarised Zeng Guang’an, Chairman of LiuGong. “We are well prepared and work with an attitude that embraces the ‘new normality’ era of the Chinese and global macro economies, and the construction equipment market specifically. I trust that thanks to the joint efforts of our new leadership, our vast number of employees, subsidiaries and dealers, and the development of our various facilities, we will overcome the challenges and continue our success in the future.”
Source: Branding and Communications