Crane hire companies in the eastern parts of Germany are having a tough time and finding market conditions particularly difficult. We report in the news section of this issue on the growing crisis. More companies are likely to go out of business. But somehow the crane manufacturers are managing to prop up the industry and maintain their sales. In fact, across the whole country, conditions are broadly favourable and German mobile crane manufacturers have reasons to be optimistic.

Liebherr retains its market leadership, Dematic is enjoying record revenues, Deutsche Grove is operating at full capacity, Tadano Faun is growing its market share, Sennebogen continues its steady growth and is having to increase its production capacity, and Compact Truck has signed a licensing agreement with Terex which has given it an injection of cash and has potential to transform the company.

While the market for crawler cranes and foundation equipment in Germany is “stagnant”, according to Sennebogen managing director Erich Sennebogen Jr, the mobile crane market is at its highest level since 1991/92. This year’s registration figures look set to beat 1999, though no one seems to believe this growth will continue for much longer and sales now appear to be reaching a plateau. Liebherr-Werk Ehingen managing director Friedrich Bär believes that a downturn might come in 2002, as the current replacement cycle of German crane owners comes to an end. After five years of strong growth, such an event is only to be expected.

Other manufacturers agree but believe that it will only be a small decrease, pointing to the likely positive effects of Germany hosting football’s 2006 World Cup.

And then there is Bauma 2001, just six months away now. Bauma, the world’s largest exhibition of capital equipment, held every three years, usually helps generate demand as manufacturers use it to launch new models. The organisers promise there will be none of the traffic chaos of 1998, with new road and rail links in place.

Studying the market figures, all the German manufacturers of all-terrain cranes are able to point to successes. In 1999 there were 707 new ATs registered in Germany, up 17% from 1998’s figure of 603 and 40% up from 1996’s low of 500 units. In terms of market share, the loser was Liebherr whose share dropped below 40% in 1999 for the first time since 1994, in the days when Krupp (now Grove) could claim a quarter of the German market. Dematic’s AT sales in 1999 rose a staggering 75%, taking its share above 20% for the first time and overtaking Grove.

Dematic says that this year it will raise its market share to 30%, though it will need to have an exceptional second half to achieve it. Of the 315 ATs registered in Germany in the first five months of 2000, 45% were from Liebherr, 20% from Dematic, 18% Deutsche Grove and just under 15% Faun.

However, statistics never tell the full story. Dematic’s reputation was built on its large cranes, but its current success has been built on the two and three axle city crane models, the AC 25 and the AC 40-1, which last year accounted for two out of every three cranes it sold. This market might be close to reaching saturation, competitors suggest, though the city cranes remain much loved by those who own them.

Grove, on the other hand, has been growing in the more expensive five- and six-axle categories. In the first five months of this year it sold twice as many five axle ATs in Germany than either Dematic or Liebherr. But Dematic only began delivering its AC 100 in the fifth month of the year. With production of this machine now at full speed – three or four a week – Dematic’s product mix is very different from last year and by the end of June it had reached a 31% German market share for the first half of 2000. So it may indeed yet reach that figure of 30% by unit for 2000.

All of this suggests that Liebherr might be losing out, but this is not because crane buyers no longer want Liebherr machines. “Our numbers are only down because of the unavailability of machines,” says Bär. It is a problem that competitors might envy. Liebherr has an order book of a year to 18 months, depending on the model. Sales revenue was up 7% for the first half of 2000, including revenue from used cranes. On 1 July 2000 it had DM660m of orders to December and DM570m for 2001. Its market leadership does not appear to be under threat yet.

The growth in global demand for AT cranes has put pressure on the German manufacturers. The extent to which long order books is suppressing demand is not clear. In general, Germany’s crane factories are operating at capacity. (At Sennebogen’s small facility in Straubing there is not even room to swing a boom.) Grove has responded by contracting out the manufacture of its two-axle GMK 2035 to GRC in Italy. Liebherr, as previously reported, is building a new production hall covering an area of 37,200m2, increasing its total production area to 123,000m2. The theoretical annual capacity of Liebherr-Werk Ehingen is about 900 mobile and crawler cranes at the moment, although it is has actually programmed to produce 1,100 machines this year. The new hall increases capacity 40% to about 1,400 units. However, given that it forecasts a slight downturn in the market ahead, it plans only to increase production to 1,200 next year, and even that figure depends on the economy holding strong.

The only struggler in the German market today appears to be Terex PPM of France, whose recent growth spurt may be fading away. During most of the 1990s it sold about 20 or 30 cranes a year in Germany. Then in 1998 and 1999 there were 64 and 54 units registered respectively, mostly two-axle machines. But in the first five months of 2000, just seven PPM cranes were registered in Germany.

Parent company Terex could revive its fortunes in Germany, however, when it begins production of Compact Truck all-terrain cranes next year. Success depends on Terex making the CT crane price competitive, however. (Though Compact Truck is registered in Switzerland, it manufactures its cranes at two plants in Germany, at Ulm and Weimar.) Terex vice president Steve Filipov says that in fact the benefits are already starting to flow. He says that by the end of June this year PPM had sold 28 machines into Germany, and the order book remains strong. PPM sales rose immediately after the licence agreement was signed with Compact Truck, he says, as PPM began part-exchanging new PPMs for used CTs.

Filipov also says that sales figures, as opposed to registrations, put PPM in a better light. He says about 100 PPM cranes were sold in Germany in 1999 (there were 54 registrations recorded), and that’s not including the 40 machines sold to IKH, the failed crane dealer that went into receivership at the start of this year.