Despite challenging times in construction, earth moving equipment manufacturer Kubota is optimistic about the future. UK Plant Operator’s St John White talks to managing director David Hart and Glen Hampson, business development manager about the impact of Covid-19 on the market and how the business is supporting its customers.
2020 was shaping up nicely to be a memorable year for the Japanese earthmoving giant Kubota. Its UK business was on a roll. With unit sales in 2018 topping 6,400 and 2019 remaining strong at 5,300, the brand was still leading the way in the competitive mini-excavator market. The first couple of months of 2020 saw an unprecedented level of new enquiries and to top it all, the company was celebrating its 130thanniversary. What could possibly go wrong?
Then the Corona virus erupted, and the world changed. Kubota UK’s sales in construction fell off a cliff and its headquarters in Thame, Oxfordshire was reduced to a skeleton staff as many of its 140-strong team was furloughed. “We had so many great plans for the year,” comments a rueful David Hart, who has been in position for two years. “With several key new product launches scheduled and an anniversary campaign planned, the impact of lockdown was a serious body blow to Kubota. The last few months have been a very strange time for us. I live near the Thame facility, where all of our administration, management and assembly functions take place, so have been there every day. Walking around the place has been very quiet, as we’ve been operating with a limited team, supporting mainly the agriculture market, which has thankfully remained active despite Covid-19.”
Like every other business, the impact of the global pandemic has been breath-taking in its ability to halt the wheels of industry. But despite the drop off in orders and manpower challenges, Kubota insists that it’s getting back to business as usual.
Glen Hampson explains: “It’s ironic that this year started so well for us. At times we were finding it tough to keep up with demand to be honest. Our 19-strong UK/Ireland dealer network were working their socks off to deliver orders, maintain our well-known service levels and customer satisfaction scores – then the lockdown was confirmed on 23 March and the world stopped.
“To cap it all, we had a major product launch of our new R070/R090 wheel loaders just before the shutters came down. While the launch itself was a success, the subsequent dealers training – which is vital to any new product introduction – had to be completely revised and taken purely on-line! This comprised a huge amount of liaison with our partners in both Germany and Japan – and in the end we delivered a virtual training module, which enabled the dealers to start selling the new range.”
Strong product range
Kubota’s dominating position within the midi-excavator market is underpinned by its eight tonne KX080 machine. Well known for its capability, reach, ergonomic design and impact on productivity, the KX080 boasts between 30-45% share of the UK market.
And while sale of these ‘big boys’ have seen a sharp decline in April and early May, it has been the lighter 0.8t and 1.5t excavators that have kept the business ticking over. “One positive aspect to come out of the pandemic has been the continued sales of these smaller machines – which are favourites of the renovations and DIY market,” explained Hampson.
Undeterred by the impact of the Covid-19 epidemic, Kubota has launched three new 5-tonne machines in the UK – the KX060- 5, U56-5 and U50-5 – which should be available later this summer. Developed in line with customer feedback to ensure the machines are aligning with the demands of the industry, the excavators boast a choice of either a reduced tail swing or the conventional excavator.
Kubota’s zeal for future growth does not seem to have been dented by the global pandemic. Both Hart and Hampson are pragmatic about the rest of 2020 and next year and are using the downtime to make ready when the market reopens. Hampson comments: “While March and April have been very quiet in terms of housebuilding, roads and other construction projects, we have been preparing for a sharp demand for products, once industry is back on its feet. For us, having iron on the ground is vital as we believe the industry will need to get back to finishing projects urgently. However, 2021 could see a more demanding landscape – but that very much depends on the government’s economic plans.”
David Hart agrees, adding that while Brexit was a major issue for the business last year, it’s been relegated by the effects of the Covid-19 epidemic. He said: “We’re prepared and ready for whichever way the EU deal goes. What worries me more is the economic strategy moving forward, which could see investment in infrastructure and housing being used to support the wider economy and the NHS.”
Kubota UK has four main divisions; agriculture, grounds care, engines and construction. In 2018 the business posted annual sales of £282m and half of that came from construction. While major roads, infrastructure and projects such as HS2 will maintain the industry to some degree, Hart is concerned that the housing market may become a victim of mothballing, as it did in the eighties. “I am not saying it’s going to happen for sure,” he says, “but I would hate to see investment and confidence in our housebuilding sector waning. It’s an element of our country’s fabric that is crying out for investment – and that needs to continue.”
Stick with us
While Hart sees the potential challenges that a change in thinking at Whitehall could bring, Hampson is perhaps more upbeat about the future. “Customers using excavators on site, dealers providing aftersales support and we as the equipment manufacturer are all in this together. While we can’t dictate government policies, we can all pull together and ensure we have the right kit and support to undertake work when it comes along. Success will be based on long-term relationships and not fly-by-night operators who are only in the game to make a quick buck.”
Hart is in total agreement with this. He concludes: “Kubota has been around for 130 years and in the UK for over 40. We’re not going anywhere. We’re in it for the long haul. Given our sheer breadth of industrial machinery knowledge and global scale, we’re dedicated to supporting our customers through this tough period. It’s not going to be an easy ride, but if we work together, we will get through this. I know if I was a contractor or hire business, I’d want the confidence of good products and great aftersales service that I could rely on. That’s exactly what we strive to give.”