With a commitment to ensuring post-sales service through dealers such as D&D Diesel and Ronco Construction Equipment and Engineering, XCMG is determined to change its reputation down under. Owners of XCMG’s crane distributors in Australia David Kapahnke and Robert Smith open up on their recent trip to XCMG’s factory, the quality they saw, and why the brand is unfairly tarnished on Australian shores.
Partially government-owned and manufacturing heavy duty machinery from the Eastern part of the map, XCMG’s ambitions to expand into the Australian market was always going to be an uphill battle.
And so, when the company sold its first machine to Australia back in 2006, it appeared fortunes were shifting; there was now a pathway into the market.
But, as founder of Victorian based D&D Diesel David Kapahnke says, the companies that brought XCMG’s products into the country at that point in time “didn’t support the product correctly”.
“It was their biggest issue,” he says. “There weren’t enough parts brought in; there weren’t enough backup services provided.”
Owner of Western Australia’s Ronco Construction Equipment and Engineering, Robert Smith, concurs with David’s sentiments.
“It’s all about being there for your customer when they need you,” he says. “You can buy anything you want, but it’s up to how the company responds when you’re in need after the purchase that defines good service.”
However, as David points out, times have changed. Where once they fell short on delivering in post-sale servicing, parts are now in ample supply for both dealers to store and provide on short notice to anyone who goes through the XCMG brand, with both David and Robert saying they want to provide that service and backup support to deliver a good experience to customers.
“When Ronco sells a crane, we have a list of parts that we order for that particular crane to every crane we bring in, because we want to be able to support our customers,” he says. “We found the only way to do it is to have your own part store, not rely on others.”
With the two companies being the only distributors of XCMG’s crane-related products in Australia, both directors are eager to promote the message that the Chinese manufacturing company’s products and follow-up services have drastically changed from over a decade ago. Having just been overseas to visit one of their eight factories, the two are situated in a uniquely advantageous position to speak to the quality coming from the East.
“I was very impressed with the factory,” says David. “The way it’s set up, everything was absolutely spotless; the robots were fantastic, the production line from start to finish was fantastic.”
“I was completely blown away by the levels of efficiency there too – even down to the air filtering system they have in place, so they can reduce the amount of pollution released into the environment.”
As mentioned in last month’s edition of Cranes and Lifting, an increase in the quality and amount of automation is one of the latest features to come out of the XCMG factory visited by the two Australian dealers – and the modernisation of the factory since his last visit is a point Robert is keen to emphasise.
“I went to the factory back in 2006 and it was quite agricultural, to be honest,” he says. “This trip, however, there’s nobody hand welding. The robots doing all the welding robots are made in Japan: Nippon robots.”
“They’re using the same state of the art machines as everybody else; I showed my welder here the welds we saw in China, and he told me straight away: ‘that’s not a human weld. That’s a robot weld’,” he continues. “A human cannot get it that perfect.”
And, according to Robert, that’s what the world needs to “understand” when it comes to the technology coming out of the XCMG factories; in his words, it’s “state of the art”.
And David echoes his sentiments, stating that what was occurring overseas was “incredible”, and that the “size” of everything was “just mind blowing”.
But it wasn’t just the quality of the technology and efficient working procedures that left the two dealers dumbfounded on their most recent visit. As the third largest construction manufacturing company in the world according to the KHL Yellow Table, XCMG manufacture a lot of heavy-duty machinery. Witnessing the amount first-hand, however, reinforced the magnitude of the operation coming from China for David and Robert.
“We couldn’t believe the number of cranes we were seeing in their yards. In some cases, it was in the hundreds,” says David. “We did ask the question with all those cranes there, how much of their stock was already sold, and it was around 70-80 per cent, meaning all the rest was stock in reserve for whenever they needed it.”
“Additionally, we’re only talking about how much cranes they got in stock; if you go into the mining sector, and you see a 700-tonne excavator sitting there,” he continues. “And then those five 560-tonne excavators are just sitting in a row in stock. And then you look around the corner and there’s 12 240-tonne dump trucks just sitting in a row.”
Supporting David’s example, Robert recollects the 4000-tonne capacity crawler cranes sitting in the factory’s yard, pointing out that any other manufacturer would only make those kinds of machines to order. It’s this kind of availability that operates in tandem with the improved quality in the factories and the volume that the company needs that allows XCMG’s products to be so competitively priced, he says.
“If I’m buying one thing at a time, it’s going to be more expensive for me than building thousands of cranes a month where I can buy all my raw materials in bulk and spend less,” he says. “I believe that’s where the perceived cheapness of the crane comes from: it actually comes from availability and mass orders.”
And, as David adds, overseas pricing factors need to be considered.
“Labour is cheaper over there, and items cost less,” he says. “Say with their steel, for example: it’s not that the steel is of any poorer quality. It’s just cheaper, and they’re buying kilometres at a time of steel, not metres.”
READ MORE: XCMG enhances its crane manufacturing capacity.
And it’s that resounding message of overall quality coming from the East that David says really needs to be driven home.
“People have listened to reports from 10-15 years ago about how the crane operates and feels, and they still judge it by those standards,” he says. “XCMG is still here after the same time period – they’ve just come on leaps and bounds in terms of improving their product and servicing.”
Speaking to the reception XCMG products now receive upon their initial handling, David notes the “surprise” people experience when they first operate the machines, as the brand’s previous reputation belies their experience.
“Once we get people in the seats, the product speaks for itself; we understand we have a few differences to other competition,” he says, “but we’re not hiding anything. The cranes are what they are, they’re a good crane, and they’re good value for money.”
“Whilst we were there, we were actively asked: ‘bring your customers to see us manufacturing, we want them to see the quality and how they made’,” says Robert.
“XCMG is not scared of people going to its factory to see what it does and what it creates firsthand.”
READ MORE: XCMG launches 120-tonne all terrain crane at ConExpo.