27.10.2010

JLG enters the spider lift market

JLG has shown a 19 metre Diesel/AC electric powered spider lift on its stand today at SAIE in Bologna.

The unit on display is the first of an agreement that it has signed with market leader Hinowa to market and sell its spider lift products under the JLG brand name.
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The JLG 19 metre spider lift

The deal which will be formally announced this afternoon will see both the Hinowa and JLG products being sold in most European region markets by the companies’ respective distribution networks. At the outset Germany, Austria and the Benelux markets will be excluded in order to protect exclusive distribution contracts that Hinowa has in these countries.

In the rest of the world JLG will have exclusivity to sell the Hinowa spider lift products under the JLG name and Hinowa will not market its spider lift range under its own brand in those regions.
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The 19 metre model at SAIE

The agreement will begin with four models, the 14 metre Goldlift 14:70 IIIs, the 14 metre 14:72 Lightlift, along with the Hinowa Lightlift 19 metre 19:65 and 23 metre Lightlift 23:12 models.

Update - photo from the formal announcement
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Dante Fracca of Hinowa with Wayne Lawson of JLG

Vertikal Comment

This is a highly interesting deal for both companies, which appears to bring together two quite different partners.
One is a billion dollar division of a large publicly held corporation and the other a small family owned company.
However, both have surprisingly similar engineering principles and detailed approach to product testing and quality control processes. They are also both leaders in the specific markets they cover.

JLG has been unusually bold in becoming the first major manufacturer to jump into the growing spider lift market. One assumes they have seen the long term volume potential for this product sector?

Hinowa stands to benefit substantially from a massive increase in volume if the agreement achieves even a small part of its potential. It would have struggled to have broken onto the mainstream North American market and would have had an even greater challenge to be accepted by major rental companies such as United Rentals. Whereas JLG stands a real chance of doing so, turning the spider lift from a niche machine into an almost mainstream product.

If JLG puts a real effort into this new product line, which it appears keen to do, it could transform the size of the spider lift market as a whole. Assuming the agreement is such a big success the two companies need to be thinking about the next step in their partnership.
If JLG ends up selling over 1,000 units a year around the world, which is entirely possible, it will surely want to start building them itself? If it does - buying Hinowa would be the obvious route, if so will the owners want to sell? If they don’t what happens?

It is important for Hinowa that it keeps its European distribution network intact and strong and maintains is strong independent brand identity. It serves a largely different customer base and will need it more than ever if the deal does not work out.

Deals such as this do tend to fail more than they succeed. Success depends on both parties being enthusiastic and open, with a strong goodwill between the two teams that have to make it work. Both companies need to gain from the partnership and both need to be equally keen to make it work.

At the risk of being proven wrong in 12 months’ time, the two companies do appear to meet all of the above criteria. As long as the JLG sales teams in places like the USA recognise the potential they are getting and Hinowa does not change its principles in terms of engineering and build quality as the higher volumes come on stream – the deal should work well for both companies.

However they do need to consider what the next step might be should it really take off and then discuss the options openly.

A win-win deal.