When Japanese construction equipment manufacturers gather at the Conet exhibition at the Tokyo Big Site this month, it will not be a celebratory affair. Japan is now in its third or fourth (depending on product type) year of dwindling demand for construction equipment.

June this year saw shipments of construction machinery down 11.5%, year-on-year – the ninth consecutive monthly fall, according to the Japan Construction Equipment Manufacturers Association. Domestic shipments of construction cranes registered a double-digit decline.

Worldwide shipments in 2000 seemed to herald a change in the fortunes of Japanese crane manufacturers, with shipments of rough terrain cranes up 8% and crawler crane shipments up 4%. But the picture for the first five months of 2001 suggests a reverse. Crawler crane shipments were down 17% on the January to May period of 2000, while RT shipments were down 24%.

For both truck cranes and the high volume truck-mounted crane market, the picture is slightly better. Sales of truck cranes fell by 47% last year. In the first five months of this year they were back up again strongly, though a long way from the numbers posted in the years before 2000. While worldwide shipments of other types of cranes generally crashed to a third of their peak levels, truck cranes fell to a fifth of their peak, from about 1,000 units a year to about 200 units last year. Perhaps sales have finally and firmly bottomed out.

Shipments of truck-mounted (or loader) cranes have fallen from about 30,000 units a year five years ago to 12,000 in the past couple of years. Having fallen 16% in 1999, shipments fell just 2% last year, and in the first five months of this year were 10% up on the equivalent period 12 months previously.

Given this market shrinkage, there is a clear need for radical measures and several alliances have now been formed among manufacturers to cut costs, increase revenue and achieve new levels of efficiency. Foremost among thesew agreements is the alliance between Sumitomo, Hitachi and Tadano, which are creating a global crane group, as previously reported (News June01, p13). In addition to this, Tadano is to produce the carriers for Kobelco’s rough terrain product line. IHI is already producing crawlers for Terex to badge and sell as Terex American Crane in the USA. Much rests on the success of deals like these, but without a turnaround in the market in Japan and/or Asia, further radical action may be necessary.