Despite current tough market conditions in South Africa, Stephen McGregor, business manager for CASE Construction Equipment (CASE) in South Africa, believes that a closely knit partnership between the OEM and its local dealer, CSE, continues to yield growth opportunities across all market segments.
“The construction equipment market is down nearly 30% year-on-year and it is through these tough times that relationships between manufacturers and distributors either become tense or a mutual understanding and a strong partnership is formed, as with CASE and CSE,” says McGregor. “Communication, a strong understanding of where we are and where we want to be in the short to long term in this highly competitive, depressed market, become key factors. So, despite challenging conditions, CASE and CSE are building on their long standing relationship to find growth opportunities across all market segments.”
With the overall market being as depressed as it is, McGregor reasons that it would be incorrect to say that any one product segment is the most lucrative. “It is a challenge doing business today and we fight for each and every deal and for each and every customer to be able to offer the value they are looking for in equipment. Between CASE and CSE we do not have a ‘one size fits all approach’, therefore we regard each customer interaction and approach each deal differently.”
McGregor believes that compact, or mini excavators, are the next big thing. He notes that South Africa has a 10-year lag behind Europe when it comes to mechanised methods and new machines. “We have been through the compact equipment boom in Europe already, and it is still growing. An example of the shift to compact machines can be seen in the UK where the total backhoe loader market is only around 600 to 700 machines per annum. If we compare that to the drop in backhoe loader sales in South Africa then I believe we are heading the same way over the next 10 years,” he says.
So what does it mean for our customers? “Well, at this stage, because the mini excavator market is so small, it’s like starting with a blank sheet of paper where you get to decide how to transpose this compact equipment success of Europe into South African market conditions. It will take a handful of plant hire, construction and agricultural customers to realise the opportunities not only with the compact excavator but all the other compact equipment that go along with it.”
Read more of McGregor’s views on the South African construction equipment industry in the Profile section of the December edition of Capital Equipment News.