2022 is proving to be more of the same – good demand tempered with supply issues, technical challenges and a cloudy outlook. But nowhere is better to debate these issues than at the world’s biggest show, bauma, says Giuliano Parodi, Global CEO of Yanmar Compact Equipment.
People have been telling me that exhibitions have been ‘dying out’ ever since I came into this industry more than 20 years ago. But despite the growth of virtual meetings trade shows continue to be an important channel to connect with customers and build personal relationships. Bauma remains the king of shows and generates a buzz like no other. At Yanmar CE we believe that nothing beats coming together face-to-face with customers, dealers, suppliers and other partners. You build great relationships and learn so much. In recent years we learned what can be done with Zoom/Teams/Google Meets, but we believe that a handshake still cannot be beaten”
Balancing supply with demand
This is a cyclical business but the current ‘up’ part of the cycle has gone on for way longer than normal – over a decade. Growth never lasts forever and it’s inevitable that this boom period will end eventually. The only questions are: When? How deep? How fast? and how long will it last?
Obviously, I hope the answers to the questions above are: ‘Not yet’, ‘Quite shallow’, ‘Slowly’ and ‘Short’. That said, I might already be wrong on the first of those, as recent order intake is already showing signs of a slowdown in the rate of growth. This varies country-to-country, of course, but overall I hope there will be a gentle cooling of a hot global industry and allow the sector to find a balance between supply and demand. This will also reduce pressure on our supply and logistics chain, which has struggled to keep up with demand.
Personally, I consider the cyclicality of our business as healthy: the calmer periods allow us to reflect on our strategy and actions that deliver long term sustainability, instead of constantly trying to keep up with soaring day-to-day demand, Whatever happens in the coming months, thanks to increased urbanization, mechanization, and lack of available labor I remain confident that the future of the global compact equipment sector remains attractive long term.
Macro and Micro
The great thing about going to bauma is that it is both micro and macro. On the micro hand we try to sell one machine to one person, while on the other we talk about where an entire industry of hundreds of thousands of machines is going. One of these macro issues is what are we collectively going to do about construction equipment’s carbon footprint?
At Yanmar Compact Equipment we are unveiling a suite of electric equipment at the show. They are best-in-class, and we are genuinely committed to the energy transformation and lowering the impact of our machines on the planet. But for the foreseeable future sales volumes of electric machines will remain modest
For this to change we need to come together as an industry and make it easier for customers to make the switch to electric. A good place to start would be to agree some common technologies – such as standardized charging infrastructure that works across OEM brands. Government incentives/tax breaks are also needed to help jump start the market, just as they have successfully done in the automotive sector. But unlike in the automotive sector, users also need to change their way-of-working with the switch to electric. Ultimately, machinery OEMs are just one piece in the energy transformation puzzle, and a joined-up approach is needed, one that includes rental firms, construction companies, energy companies, governments etc. to produce a joined-up approach to going electric. Once we make it easy for customers to switch, sales volumes of electric machines will soon increase.
Ready for anything
Whatever decisions get made at the show, we are excited to be a part of the bauma magic. This year we come to Munich with an added spring in our step. We have rebranded into our distinctive ‘Premium Red’ livery – and the changes to the business go much deeper than a coat of paint. We are broadening and deepening our product offering and doing the same to the markets and customers we target. With shorter supply lines, increased local manufacturing outside of our Japanese heartland, strategic acquisitions and an evolving tech skillset, we have built strong foundations during this once-in-a-lifetime boom period. Whatever the future holds, we are ready. Giuliano Parodi thought leader for bauma
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