Competing for control

You are thinking of fitting radio remote control to your crane. Who do you call? There are a host of reputable manufacturers to choose from, including NBB, Cattron, Commander Controls, Cavotec, Isuzi, Imet, Autec, Datek and Jay Electronique, to name but a few. Each has its regional strongholds. Worldwide, however, two names seem to lead the field: the German manufacturers HBC-radiomatic and Hetronic Steuersysteme.

According to Hetronic’s export manager, Bernd Mayr, practically all the OEM manufacturers in both construction equipment and bridge cranes use either Hetronic or HBC systems. “No one is going with any of the others,” he claims.

The key to success is to win the big customers and keep them. In self-erecting tower cranes, honours are shared. HBC supplies Liebherr distributors and Hetronic supplies Potain’s, says Mayr. In the hydraulic truck crane and loader crane market Hetronic claims dominance (though it is being challenged by Sweden’s Scanreco), while in industrial markets it bows to HBC’s stronger position.

HBC is the longer established company, having been around for about 50 years, with its roots in radio repairs and then walkie-talkies, before producing industrial radio remote control systems. HBC has nearly 100,000 remote control systems in the field, though it does not know how many of them are still in operation. Hetronic is only 15 years old. Both are now exclusively in the remote controls business.

HBC sold 15,000 systems in 1999, according to sales manager Karlheinz Günter, up from 12,000 in 1998. In contrast, the number sold in 1990 was just 2,500.

It is impossible to get an accurate picture of total world sales of remote control systems, but Günter suggests it is possible that HBC has a 30% world share. He is rather more confident in estimating his German market share at nearly 43%.

HBC and Hetronic are both privately-owned family businesses that don’t disclose many numbers. Hetronic claims that it has “closed the gap” on HBC’s traditional lead. “I think we now have similar turnover,” says Mayr. He says turnover increased 15% in 1999, and with HBC growing sales by a similar amount it may be reasonable to assume that this figure approximates to the growth of the total market.

However, the market for radio remote controls remains only a fraction of its potential size, so marketing efforts are fiercely competitive. It is impossible to say quite how great the potential is, though. Only about a third of EOT factory cranes in Germany are fitted with radio remote control, and Germany is a more developed market than most.

In Germany, most of the growth occurred in 1990s. In the decade ahead the battle ground will be in North America and Asia and in new applications. HBC has delivered systems for mining machinery such as drillers and baggers. Hetronic is also seeking new applications. “Excavators is a market we are looking to develop,” Mayr says. “We are working with a customer in Japan. Explosion-proof systems is also a fast-growing business.” When it comes to developing international markets, Hetronic appears to have an edge. It has manufacturing bases in the USA and Malta as well as Germany. It has sales and service operations in Australia – where it also plans to begin manufacturing this year – and in Japan. “We are looking to get to Asia, maybe Singapore,” says Mayr. HBC has operations in Germany, the USA and France.

The leadership of these two manufacturers, and the fierce rivalry between them, is reflected in their marketing efforts. Their advertising spend is significant and their presence at major equipment fairs is hard to miss. The rivalry is not entirely friendly. Claims and counter-claims are swiftly challenged. Hetronic, it seems, has introduced a spirit of aggression to the market that HBC does not entirely welcome. “We work more on a partnership philosophy,” Günter claims. “The sales organisation of Hetronic is more aggressive.” Could it be that the vigorousness of the marketing campaign is somehow a reflection of what those who know little about controls technology have always assumed: that radio remote control systems are all basically the same? Such a suggestion induces mock horror in both Mayr and Günter.

They both attribute the dominance of HBC and Hetronic down to their ability to offer customised solutions. Günter says that 50% of systems sold by HBC in 1999 were customised in some way.

“We are always trying to be innovative,” he says. “The customer can get from HBC anything from a very low cost standard system to a very specialised, tailored system. They can even have the front plate in Chinese lettering if they want it.” Other manufacturers, he says, are more focused on selling standard systems.

Says Mayr: “I’d never tell this to a customer, but I think that both companies have a pretty good idea of how remote control works.” But beyond this point, there are important differences, the men say. According to Mayr the key difference between the two is that Hetronic uses a modular approach to design, giving the customer only and exactly what he asks for. “If he wants 24 digital functions, he gets 24 relays, not 30,” he says. “Our competitor is using a basic board.” This makes HBC a little cheaper, Mayr says, but he claims that Hetronic’s approach wins when it comes to servicing and repairs, as each module can be taken out quite simply. “The customer can service it himself with just a screwdriver and whichever module needs replacing,” Mayr says.

Günter counters that 80% of problems in all radio remote control systems are on the transmitter side, not the receiver, and it is only Hetronic’s receiver that is modular.

He says that one difference between Hetronic and HBC is that Hetronic offers three types of receiver with different safety levels. “HBC offers one safety level which is always the highest,” he says.

A more significant difference is that HBC manufactures many more components itself, Günter says – “even operating elements like push-buttons and joysticks, so we can ensure good quality. That’s one reason why customers prefer HBC.” In contrast, Hetronic buys in many of its components.

“Finally it is the customer who decides who is number one in the market,” says Günter. “If the customer is not happy, he will not buy from you again.”