After seven years of growing the Doosan brand under Bobcat, Doosan is now separating itself with the aspiration of being one of the top five heavy equipment manufacturers in North America.
Under the new arrangement: “Bobcat remains part of Doosan Bobcat North America, the U.S. and Canadian subsidiary of Doosan Bobcat Inc., which includes Bobcat compact equipment, Doosan portable power products, and Geith attachments,” says Aaron Kleingartner, marketing manager for Doosan Infracore North America, LLC. “Doosan Infracore North America, LLC (DINA) and Bobcat Company are sister companies in the Doosan organization. The decision to split the Doosan heavy construction equipment business was always planned. Both Bobcat and DINA have the staffs to focus on their business objectives, respectively.”
Many other heavy equipment manufacturers have combined forces for short times, usually five to 10 years. Oftentimes, they are between a foreign company and a domestic one.
The most notable exception is John Deere partnering with Hitachi (Japan); the companies just celebrated the 30th anniversary of their co-operative agreement.
“Bobcat is a mature brand with a strong presence not only in North America but globally, which provided opportunities for many lessons that Doosan was able to leverage since the compact equipment and heavy equipment groups partnered,” says Kleingartner.
“The Doosan heavy construction equipment business evolved with the help of Bobcat to the point that it made the most sense for the Doosan equipment business to stand on its own and align with the other regions of the world as it pertains to heavy equipment.”
Kleingartner continues: “As sister companies under Doosan, both Bobcat and DINA will continue to share best practices with each other and look for ways to make each other stronger. At the same time, both Bobcat and DINA will be able to make decisions that align with the needs of their own businesses. The recent changes to the organizational structure doesn’t mean the collaboration and exchanging of best practices and efficiencies will stop.”
When announcing the split, Doosan stated its ambition to be one of the top five heavy equipment manufacturers in North America.
Although Doosan ranks sixth for global heavy equipment sales with more than six per cent market share, their market share in North America is about half of that.
Toronto auction data for the last 12 months indicates the top five heavy equipment companies are Caterpillar, John Deere, Hitachi, Komatsu and Volvo.
When looking at the top position by number of machines in the field and by machine category, Doosan (including the company’s legacy brands Daewoo and Moxy) ranks seventh in the large excavator category and less than top 10 in the mid-size excavator, mini excavator and articulated dump truck categories. There are mixed reports on the number of Doosan wheel loaders in the area.
While there is a relatively high number of them is at auction (seventh), there is much less than that in the field (less than top 10). Aiming to be at or near the top, the company will have to overcome distribution challenges, limited product offering and slower technology adoption.
“Doosan Infracore North America needs to continue to improve its coverage in North America with equipment dealers that will not only meet but exceed the expectations of its customers” says Kleingartner.
Doosan doesn’t have a long-established and well-connected group of dealers. In North America, they have 153 dealer locations, 30 of which are also Bobcat dealers. Bobcat, on the other hand, has more than 500 dealer locations in North America. Doosan doesn’t have any dealers in Toronto and has identified Toronto as one of three cities in North America that it’s targeting for growth. The nearest Doosan dealerships to Toronto are Bobcat of Hamilton and CG Equipment (Guelph and Zurich). Hartington Equipment is three hours east of Toronto.
Compare that to the number of dealers of the top five heavy equipment companies in that same area. Caterpillar has Toromont with three locations and Battlefield Equipment with 16 locations. Komatsu has equipment sales and service with two locations, but also Cooper Rentals with 12 locations. Hitachi’s dealer is Wajax Equipment which has 11 locations. Volvo’s dealer, Strongco, has six locations. John Deere’s dealer, Nortrax, has six locations. With the exception of Wajax, all dealers have been representing their respective manufacturers for at least two decades.
Doosan has a more limited product offering than all the top five heavy equipment companies. It doesn’t have a skid steer loader line or any dozers or road construction equipment. The only top five heavy equipment company with a product offering similar in scope to Doosan is Hitachi.
The Doosan excavator lineup begins with the top of the compact excavator class — a six-tonne and an eight-tonne excavator. This is followed by three models in the mid-sized category and three models in the 20- to 29-tonne category and five machines that are 30 tonnes-plus. Only the 14-tonne and 22-tonne machines are available as reduced tail swing models. Wheeled excavators are available in the 14-tonne, 18-tonne and 21-tonne models.
By comparison, Hitachi has six compact excavators, three mid-sized, two in the 20- to 29-tonne range and six models that are 30 tonnes-plus (including two models that are larger than Doosan’s largest excavator), as well as one wheeled excavator and six reduced tail swing models ranging in size from 7.5 to 34 tonnes.
Doosan has announced its intention to introduce new models, such as a 16-tonne excavator that would fill a four-tonne gap between the company’s 14-tonne and 18-tonne excavators and more models on the heavier side.
“DINA needs to continue to embrace new technologies, continue to improve its products to be better than any other brand, to offer products that are not only productive but reliable and at a fair value, and expand on the products that the company currently offers,” says Kleingartner.