Whether you already specialize in aerial rentals or are simply considering dipping your toes in those waters now that the rental market is in full recovery mode, it’s important to get a sense of where this segment of the industry stands and where it might be going. To find out, we talked to three leading aerial manufacturers about the factors they see affecting business in the near future and beyond. In on the discussion were: Matt Fearon, vice president and general manager, AWP Americas, Terex AWP, maker of Genie brand equipment; Jeff Ford, global product director at JLG Industries; and David Smith, president of Snorkel. Here’s what they had to say:
How is 2012 shaping up for the aerial market and your company specifically?
Matt Fearon, vice president and general manager, AWP Americas, Terex AWP: The North American market for aerials is very strong and continues to improve. From a Genie perspective, many of our customers showed early confidence in the market and submitted purchase orders in Q4 to secure 2012 deliveries. So we are off to a great start in 2012 and feel this is the second year of five- to seven-year growth cycle.
Jeff Ford, global product director at JLG: We’re seeing a number of positive signs for 2012. Replacement demand continues to drive increased AWP and telehandler sales, and there are signs that construction spending is moving in a positive direction.
David Smith, president of Snorkel: For the industry, 2011 was definitely better than 2010 and we expect further growth in 2012. This will be largely driven by fleet replacement programs in the rental sector, both in North America and Europe. New emissions legislation will also drive sales of big booms. At Snorkel, we will also drive growth by increasing market share in several key territories and by capitalizing on interest in our enhanced product range – we used the downturn to develop and introduce a lot of new machines.
How are sales overall, and specifically to rental?
Ford, JLG: Sales in our most recent fiscal quarter, ended December 31, were up nearly 74% over prior year and we experienced double-digit growth across all markets in all product lines.
Smith, Snorkel: Global sales rose by around 25% in 2011, while the order book accelerated by 170%, which demonstrates the increase in demand for aerials. Sales to rental companies in North America were pretty stable, year-on-year.
Fearon, Terex AWP: In 2011 we saw the market rebound significantly and we grew very fast to meet customer demand. In 2012 we are focusing on healthy and sustainable growth rates and leveraging the investments we made in 2011.
How much of current sales are due to the replenishment of aging fleet vs. the development of new markets?
Smith, Snorkel: In North America, it’s almost all fleet replacement for rental companies. Effectively, these guys didn’t buy any aerials for two years, so there are a lot of older machines out there.
Fearon, Terex AWP: Most growth has been primarily driven by fleet age and replenishment, but we are beginning to see some fleet expansion as well. Customers are reporting very good utilization and it’s become more widespread.
Ford, JLG: A significant portion of the growth experienced in late 2011 and early 2012 has been replacement, but we did see significant growth in developing markets including Brazil, China and India.
How does the U.S. market for aerials compare to those abroad?
Fearon, Terex AWP: The North American market is very strong right now, while the European market is improving but still sluggish. It’s still a “wait and see” environment but they are also seeing signs of improvement. Certain areas of Europe are recovering and seeing improvement while other areas are still struggling. Our factory in China is producing product, but the market is developing slower than anticipated. However, we are still committed and holding strong. We are continuing to invest in Brazil to support the rapidly growing market in South America. India is another one to watch – it is also at the beginning stages of development. Each market requires a slightly different approach and we continue to grow our local teams to support our global expansion.