#01 Outlook for China's aerial work platform industry and future development of China's rental industry
China's aerial work platform industry is still in its growth stage. Although there will be periodic fluctuations, the demand in the Chinese market will be long-term and sustained in the long run.
Judging from the size and scale of the fleet, China will definitely give birth to the world's largest aerial work platform leasing company. At present, the leaders of the leasing industry will develop in two directions: first, "going overseas" to radiate the entire Asia; second, diversification of leasing products. We have seen that China's leading equipment leasing companies are actively deploying overseas markets. At the same time, benchmarking against international leasing giants, they use "large quantity and wide range" aerial work platforms to attract customers, accelerate the introduction of new leasing products, and move towards comprehensive engineering equipment service providers.
#02 Increasingly fierce competition among manufacturers and lessors
At present, manufacturers are pursuing scale growth and market share at all costs, which is not only not conducive to the profitable development of enterprises, but also destroys the healthy market order. Such practices are usually not understood or even rejected by the international market. Next, the Chinese aerial work platform market will face great challenges, and such a situation will accelerate the integration and reshuffle. However, this is not a bad thing. The survival of the fittest will help the industry and the market return to the track of healthy development. In the long run, the Chinese market will definitely return to rationality.
We believe that Chinese customers will have a deeper understanding and understanding of brand, quality, and the entire life cycle. At present, many domestic leasing companies have shifted from focusing only on price and business conditions to focusing on equipment failure rate, durability, service life, second-hand residual value, etc. As the leasing industry gradually evolves, the Chinese market will also settle down a group of leasing companies committed to long-term operations. They have clear positioning, unique service advantages and target customer groups, and are good at cost and risk control. They will choose brands and products that are suitable for their own development.
Whether now or in the future, JLG has always been firm in its high-quality and long-life brand and product positioning, insisting on doing the right thing, conscientiously doing products and services, and creating value for customers throughout the life cycle of equipment.
#03 Why JLG can continue to lead the development of the global aerial work platform industry
In 2023, major global markets showed strong growth momentum, mainly due to the post-epidemic market recovery and equipment renewal of the North American leasing fleet. At the end of 2023, JLG's undelivered orders amounted to US$4.528 billion, and some models were even scheduled for production until 2025. We expect that the growth of the North American market will continue for about two years. To this end, JLG is stepping up its global production capacity.
JLG's global market share growth is due to its industry-leading brand and product positioning, as well as a complete service system. In the Asia-Pacific region, JLG's market share in Japan, South Korea, Southeast Asia, and Australia is growing. The Japanese leasing market also faces the challenges of low rental prices and long payback periods (usually 8-9 years), but Japanese lessors will choose equipment with a service life of 10 years or even longer to ensure that they can make money in an ultra-long payback period. Then, in the Japanese market, JLG's scissor lifts have a market share of more than 50%. In South America, especially the Brazilian market, the rental level is 3-4 times that of the domestic market. Local leasing companies pay more attention to brand premiums and create a healthy market environment. In the first three quarters of 2023, JLG's sales in South America increased by more than 80%. In mature markets such as North America and Europe, rents are usually synchronized with economic growth and inflation. Lessors and end users recognize and accept reasonable price increases by manufacturers because price increases are conducive to asset preservation.
Markets such as Japan, South Korea, and Southeast Asia also attach great importance to after-sales service and support. JLG's professional team has established long-term mutual trust with local customers for many years, laying a solid foundation in accessories, training, service response, etc. For some customers, we will even conduct an additional full-scale inspection of each product according to the acceptance criteria before shipment to achieve maximum customer satisfaction.
