As LiuGong Machinery South Africa (SA) celebrates 13 years in southern Africa, general manager Li Yi tells Munesu Shoko that several key investments in aftermarket support structures have allowed the Chinese OEM to gain ground in the regional construction and mining equipment market. LiuGong has come a long way in southern Africa, from being viewed with disdain – as was the case with most Chinese brands during the early days of their arrival – to becoming a force to be reckoned with in the southern African
As LiuGong Machinery South Africa (SA) celebrates 13 years in southern Africa, general manager Li Yi tells Munesu Shoko that several key investments in aftermarket support structures have allowed the Chinese OEM to gain ground in the regional construction and mining equipment market.
LiuGong has come a long way in southern Africa, from being viewed with disdain – as was the case with most Chinese brands during the early days of their arrival – to becoming a force to be reckoned with in the southern African equipment market. Perceived quality flaws hit most Chinese brands hard during their first ventures into southern Africa, but Yi believes that the quality of the LiuGong product was never an issue.
“It was the usual scepticism that surrounds a new brand in a new market. To give you an idea, we officially started to actively market the brand in South Africa in 2005 – although some of the machines arrived earlier than that through importers. The first machine to arrive in the country was the ZL50 wheeled loader, and some of the units from the very first batch are still operating, which is a key indicator of the tough nature of the product,” says Yi.
To date, LiuGong Machinery SA has some 2,000 machines operating in southern Africa, excluding those that are already out of service. A greater focus on aftermarket support has been a major recipe for success.
“There are two fundamental things to grow a brand in a market. Firstly, you need to have a right partner to look after the brand, and we have secured a committed partner in Burgers Equipment & Spares, our dealer in South Africa and Namibia,” explains Yi. “Secondly, having the right support structure is of essence. Right support means appropriate infrastructure, parts support and technical capability to service the machines.”
With that in mind, in 2011 the Chinese OEM set up a subsidiary in South Africa, LiuGong Machinery South Africa, to look after its regional interests. Added to this, the manufacturer also invested in a spare parts facility in the country to improve its backup support.
“The spare parts centre carries an inventory of more than US$4 million at any given point. We have also brought in a team of expert technicians to support our dealers with the necessary technical support and training. We have also invested in a training centre for all the major components on our machines, including engines, transmissions, axles and hydraulics. For example, we offer training on LiuGong ZF transmissions and LiuGong Cummins engines to both our dealers and customers,” says Yi.
In terms of volume drivers, Yi says it’s an equal split between wheeled loaders and excavators. “Traditionally, LiuGong is well known for its wheeled loaders, but we saw that South Africa is largely an excavator-based market, and through a strong research and development (R&D) regime, we have managed to design and build a product that can tackle the local operating conditions,” adds Yi.
Yi adds that local customers have come to appreciate the rugged nature of the LiuGong excavator, and this has allowed the company to competitively challenge for a larger share of the big-sized excavator market, mostly in the 50-and 70-tonne range. “We have proved that our product is very competitive in mining and quarrying applications, a segment previously dominated by premium European and American brands,” he says.
Talking about market conditions, Yi says 2017 was a very good year for the whole of South Africa. Figures released by the Construction and Mining Equipment Suppliers’ Association (CONMESA) show that 5,614 new units were sold during the year, marking a healthy 18.3% increase over 2016 results. Until then the decline in sales had seen the number of units sold dwindle from 7,250 units in 2013 to a low of 4,747 in 2016.
“I am convinced that this year’s overall market figures will slightly increase. We have already seen a big surge in our own sales volumes this year. Our Q1 2018 figures have gone up 50% compared with the same period last year. This is largely as a result of our efforts to improve customer experience over the years,” concludes Yi.
