25.08.2016

Wacker Neuson and Cat end OEM deal

Wacker Neuson and Caterpillar have announced an end to their strategic alliance on mini excavators.

The alliance which began in 2010, has seen Wacker Neuson developing and producing Cat branded mini excavators at its plant in Hörsching, Austria. Caterpillar now says that it will develop and build its own mini excavators from 2018 on. In the meantime Wacker will continue to supply is dealers with the current product range, with certain models continuing into 2019. The deal which formally got underway in 2011 was due to run for a minimum term of 20 years – until 2031.

The termination of the agreement was apparently initiated by Caterpillar. It follows the ending of a similar deal that Wacker Neuson had with Claas for the supply of telehandlers, that agreement also comes to an end in 2018, when Liebherr will begin supplying Claas. See Wacker and Claas end telehandler deal

Vertikal Comment

While mini excavators are not within our remit, news such as this does have ramifications within our sector. On the one hand one cannot but help wonder if Wacker Neuson has become too challenging to work with as an OEM supplier? Both deals (Class and Cat) predate the current senior management. We also know that Wacker Neuson produces a first class, highly reliable product- at least as far as its telehandlers go - and that switching an OEM supplier is a massive undertaking, causing all manner of adjustments and disruption - thus the long transition times.

In the Caterpillar case though, is this a sign that the company is changing its strategy and looking to bring more of its ‘Alliance’ products in house? If so this could have a significant impact on JLG, which has built Cat telehandlers for 10 years and it must be an important part of its market share in Europe. One difference is that Cat previously built its own telehandlers, which were not a great success, and we know for a fact that many Cat distributors in Europe were delighted when the first JLG built models arrived in their yards- due to their significantly better build quality. So perhaps this deal is safe, even if Cat does have a general policy to replace OEM products with its own.