What We Can Learn from Japan
An overview of the equipment rental market in Japan
This text summarise the Xiaoming Cheng's speech during the ERA Convention 2014
Area: 377,962km² (62°)
Population: 127 M (10°)
GPD/Person: 27,480€ (3° GDP Worldwide)
JCRAThe Japan Construction Machinery Rental Association has over 980 rental companies including national, regional, local rental companies and 26 manufacturers, such as Caterpillar, Komatsu or Hitachi, representing over 80% of the rental industry.
CUSTOMER NEEDSThe customer procurement needs in the next 5 years are very encouraging for the rental business as you can see in the downloadable file
RENTAL PENETRATIONFrom 2009 to 2013, the rental penetration in Japan for excavators and mini excavators has grown from 45% to 62%
INDUSTRY GROWNTH TRENDThe size of the Japanese rental market in 2013 is approaching EUR 9 billion and has exceeded the previous highest level of 2007
COMPETITIVE LANDSCAPEAktio Corp, Nishio Rent All Co, Nikken Corp, Kanamoto Co and Taiyo Kenki Rental represent 41% of the Japanese rental market. The local rental companies (more than 1000 companies) represent 46% of the rental market. The rest is covered by manufacturers like Komatsu (4.7%), Hitachi (3.5%), Kobelco (2%) or Caterpillar (2%)
TIER IV IMPACTSTier IV changes Used Equipment dependent business model:
- Used Equipment resale value mau decrease by 30 to 70% due to problems to export Low Regulation Countries on emission control.
- Manufacturers and Large National Rental Companies are highly dependent on Used Equipment profit.
- Higher purchasing price and insurance costs.
- Higher maintenance & repair costs.
- Requires skilled technicians and service equipment.
- Governmental regulations to public construction project.
- Praticable de-tier solutions.
- Huge pre-buying demand (Tier III) in 2012 and 2013.
- Potential significant demand drop (Tier IV) in 2014 and 2015
E-BUSINESS DEVELOPMENTXiaoming Cheng concluded his presentation giving an update on the Japanese rental market in terms of e-commerce and gave the example of Kenki.com, the first web store in Japan. However it seems that the trend is not yet a major one and that Japanese rental companies are still struggling with developing an effective business model of e-business fitting the Japanese business culture.
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