Chinese manufacturer LGMG has registered a UK company and set up a new facility in the country to take over the distribution of its aerial work platforms and telehandlers from APS - Access Platform Sales - its current distributor for the UK and Ireland.
The original plan was to take over at the end of the year but given next week's Vertikal Days the two parties have reached a mutual agreement to bring the transition forward to 1st October. Earlier this year the company hired Aron Westby from Skyjack to look after the UK and Irish market, and he will head up the ongoing sales effort. We also understand that it has hired a service engineer.
The company has moved into a 2,800 square metre new build facility in Speke, Liverpool, close to the airport and part of the regions Freeport area. The building has space for 500 machines and will also house a spare parts warehouse, training rooms for both sales and service, while being able to host customer events.
The new LGMG UK sales and service facility in Liverpool
The LGMG stand at Vertikal Days next week will now be staffed by the new team and ready to discuss direct sales along with ongoing product support etc.
LGMG and APS reached a distribution agreement for the UK in 2019 and in the years since the two have seen substantial success with around 4,500 units delivered to UK and Irish customers. APS says it will continue to fully support all of the machines it has sold over the five years including ones currently being delivered and will deliver to the end of the year. LGMG will look after machines it sells after taking over.
A statement from LGMG said: “It is with a heavy heart that LGMG brings an end to the exclusive partnership with APS. Steve Couling and his team have done an incredible job in penetrating the domestic markets and gaining trust in LGMG products. LGMG expresses deep appreciation and sincere gratitude for this partnership they have had the privilege of enjoying.”
“It is through the dedication, expertise and strategies of APS and LGMG joint efforts that brought extensive market share and a respectable presence throughout the United Kingdom and Ireland. There were extensive numbers of machines sold during the cooperation period whilst supporting and servicing with professionalism and enthusiasm from APS. LGMG will continue to work closely with APS, supporting their strategies and service requirements as an LGMG dealer.”
Vertikal Comment
There are signs that manufacturers are looking to move closer to end customers and diversify their revenues to include more services. This has been particularly true in the crane market where Manitowoc, Hiab and Palfinger have been acquiring distribution companies over the past year or two.
The diversification argument makes less sense for aerial work platforms, so unlikely to be the main driver here. Manufacturers often think that by ‘going direct’ they can make more money, thanks to the commission, or lower prices. In reality that is rarely the case as the overhead tends to be spread over fewer products and less revenues, which is why some aerial lift manufacturers are in fact moving in the opposite direction. The ’going direct’ is also a misnomer, as customers are simply buying through a wholly owned distributor which has costs and challenges like any other, although the buck does stop with one company.
At one point it looked as though LGMG was looking to acquire APS, rather than go through all the challenges and costs of setting up a greenfield operation. The location in a freeport zone however, is likely to provide some potential benefits, given Brexit and the possible imposition of tariffs.
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