Andrew Ryan, LiuGong North America (LGNA) president, Katy, Texas, sees a bright future for his company and the equipment rental industry as it looks to grow and expand in 2022.
Ryan was named president in August 2021 and has 25 years of experience in the construction equipment industry. Prior to LGNA, Ryan worked for Caterpillar, Deerfield, Ill., where he served in senior roles spanning machine marketing, dealer administration, rental and aftermarket parts. In an interview at The ARA Show™ 2021 in Las Vegas, Ryan spoke about some of the goals he would like to see LGNA achieve moving forward.
LGNA, a subsidiary of Guangxi LiuGong Machinery, Liuzhou, China, employs about 10,000 people and has 20 manufacturing facilities worldwide. The North America and Latin America divisions were established in 2008. The operational headquarters in Katy has a focus on supporting its expanding dealer network as well as accommodating parts warehousing and training.
“We have ambitions to grow,” Ryan says. “First and foremost, we want to expand our dealer network. We have about 30 construction equipment dealers in the U.S. right now and just under 60 forklift dealers. But, even with those numbers, some geographic regions remain uncovered and that’s where we’re looking for partners.”
Ryan says LGNA is looking toward the equipment rental industry as it adds more regional and mid-tier rental partners, particularly in those areas where LGNA doesn’t have robust dealer coverage.
“If we’re thinking about what a rental company really wants, it is a competitive asset price that gives them a good ROI (return on investment) model,” Ryan says. “They want to believe their customers are going to have a positive experience with that machine, and they want to believe that over the five years plus that it lives in their fleet, they’re not going to have to spend a significant number of dollars to maintain it.”
Ryan says LiuGong machines have five-year standard construction warranties, adding the machines are designed for the operator. From a rental fleet perspective, he says LiuGong machines are growing in acceptance with the North American customer base.
“There is no question the rental industry is going to grow,” Ryan says. “I think people sometimes underestimate in this business the amount of financial management that’s required. It’s a business very sensitive to cost inputs and revenue leakage. With those turnaround processes, a huge amount of money can be lost in the rental operation if not managed properly.”
Ryan says he is both optimistic and excited about the opportunities LGNA provides for the equipment rental industry.
“I think with the product lines we manufacture, it’s reasonable to assume that at least a third of that product has to be delivered through a rental channel to find the end user,” he says. “I don’t think we can realistically be successful as a construction brand in North America without a strong presence in the rental space, whether that’s through our dealers or through partners or more than likely, a combination of those.”
Building distribution and support
Kevin Thieneman, LiuGong North America (LGNA) chairman and vice president of Guangxi LiuGong Machinery, Liuzhou, China, LGNA’s parent company, and Chris Saucedo, LGNA senior vice president, strategy and customer solutions, see proper distribution to support key accounts as one of the continued goals
of the company.
Speaking at The Utility Expo in September in Louisville, Ky., the two executives said they’re seeing an increased demand for equipment rental and that North American market integration is crucial to the company’s success.
Thieneman says the company has built more than 500,000 wheel loaders in its 65-year history. He says LiuGong is No. 1 in wheel loaders in China and, depending on the month, No. 3 or No. 4 in excavator volume.
“We’re the leader in China and it’s the largest wheel loader industry in the world,” Thieneman says. “That’s a good position to build upon. China also has the largest excavator industry and most players, including LiuGong, compete with a globally accepted design. When you add in the scissor products, we now have a more complete lineup for rental.”
Thieneman says in terms of dealer-owned rental fleets, they’re still looking for the lowest cost of acquisition on basic dependable machines.
“Their customers are renting machines for a period of time,” Thieneman says. “Maybe for five hours. They don’t need everything with the bells and whistles and that tends to be true for the smaller rental companies,” he says.
“Obviously, the bigger rental companies, you can read what they say publicly. They want to leverage technology. I think that’s true across the board. We’re trying to go that route with our rental company in China we acquired from Herc,” he says, referring to Hertz China, which LiuGong acquired in 2020 from Herc Holdings.
Saucedo says if a rental house has a high degree of uptime, the opportunity to make money is greater. He says LGNA uses strategic partnerships, allowing the company to design products like a fully integrated manufacturer.
“The global componentry is one of the advantages with us,” Saucedo says. “You get into other OEMs [original equipment manufacturers] that are extremely vertically integrated, you’re captive to them. Not only for your parts, but also your service support.”
Saucedo says globally, LiuGong sells more than 300 different products in 22 different categories.
“We have a segmented approach,” Saucedo says. “Rental is one of our core segments. We have pretty aggressive growth targets. Gone are the days of the operator who has 40 years of experience and has operated everything under the sun. Or maybe he’s only operated one brand for his entire career. People are in and out of machines now all of the time. Especially in rental. At the end of the day, we need to design the machines that are easy to use, intuitive and what people are familiar with.”