Country report: Japan

By Euan Youdale07 March 2022

Throughout this year, AI is hearing from companies from across the world about the unique experiences of the countries they are based in. In this issue, Nishio Rent All, one of Japan’s largest access rental companies shares its thoughts on its home market.

One of Nishio’s truck mounts  at work in a dockside setting. One of Nishio’s truck mounts at work in a dockside setting. (Photo: Nishio Rent All)

With a fleet of more than 28,000 aerial platforms, operating in its home country, as well as in Singapore, Malaysia, Thailand, Vietnam, Indonesia, Philippines, China and Australia, Nishio Rent All is a long-established part of the region’s rental scene.

Nevertheless, its core business is in its home country, with 440 of its 488 depots being in Japan.

Nishio calculates the total number of self propelled MEWPs operating in Japan at around 77,000 units.

Uniquely, that number is almost matched by the large number of truck mounted platforms in the country, which amounts to around 40% of the total aerial platform fleet.

Truck mount market in Japan

Truck mounts are used for a range of applications in Japan, including the upkeep of the electricity network and a range of other maintenance and utility-related work, which covers areas that would usually be carried out by self propelled equipment and other types of vehicle mounted platforms across much of the rest of the world.

Nishio Rent-All’s truck mount fleet sits at around 2,800 truck mounted units, which represents a lower percentage of the truck mount population in the country.

This is because truck mounts to not tend to be rental products; rather they are owned by municipalities and other end users.

As Nishio says, there are no numbers relating to how many access-specific rental companies there are currently operating in Japan, but it says there are approximately 2,000 businesses providing general construction rental equipment.

About 30% of them are major national companies, with the rest being small and medium-sized, based in their local areas.

One of Nishio's underbridge inspection units Nishio Rental invests in underbridge inspection units. (Photo: Nishio Rent All)
The impact of Omicron in Japan

As with most countries in the world, Japan continues to be affected by Covid-19. “The Omicron variant spread quickly across the nation from the beginning of this year,” says Kenichi Kondou, Nishio’s investor relations manager.

The situation had been improving since the third quarter of 2021 as the pace of vaccinations ramped up, but Omicron’s high level of transmissibility has now led to further restrictions, including encouraging people to stay at home and limits on numbers able to attend events and visit restaurants, among others.”

A major impact of the pandemic, as access equipment providers around the world will attest, has been its influence on the supply chain, leading to a shortage of vital materials and parts, which has affected the company’s activity across the nations it operates.

“It will depend on the type of machine, with larger boom lifts, for example, being in very short supply. And, due to the influence of Covid-19, many parts for general construction equipment are completely out of stock.

“This has meant the lead times can be twice as long as normal and the delivery dates are uncertain, making it very difficult to plan ahead.”

Access equipment: utilization rates in Japan

However, on a domestic level, rental activity has not been so badly affected with construction-related projects experiencing no major delays throughout the pandemic.

Needless to say, there have been some challenges.

The utilization level for access equipment, including self propelled units and truck mounts in Japan was around 50% by the end of 2021; a drop of around by 5% compared with the previous year.

Booms at work in a typical steel construction application. Booms at work in a typical steel construction application. (Photo: Nishio Rent All)

“This was not due to the influence of Covid; rather, other factors were at play,” said the company.

“The utilization rate of access equipment had decreased substantially following the completion of infrastructure and other urban development associated with the Summer Olympic games.”

The games were held in Japan in 2021, after being postponed from their original dates in 2020, as a result of the pandemic.

“However,” says the company, “We expect the utilization rate to recover because new construction projects are now beginning.”

Japanese aerial platform manufacturers

The existence of major domestic manufacturers in Japan means that rental companies, under usual circumstances, have a large supply of equipment produced in their domestic market, and they do not need to rely as much on the large global players.

Indeed, Japanese rental companies are the major investors of equipment produced by OEMs in their domestic market.

However, the company’s procurement programme does extend beyond the Japanese border.

“Although we buy from manufacturers in Japan, such as truck mounts from Tadano or self propelled equipment from Aichi Corporation, we also order from manufacturers overseas, such as Genie or Haulotte.”

A Nishio scissor lift. A Nishio scissor lift.(Photo: Nishio Rent All)
MEWP regulations in Japan

Another factor of the Japanese aerial platform sector is the lack of a used equipment market.

Regulations for the use of access equipment are strict and its use is limited, including investment in used equipment.

However, there are no limits on the age of MEWPs in a rental fleet, and as long as they are maintained properly it is not uncommon to find units in fleers that are 10 years old.

The plan, says the company, is for expansion in the near future. Nishio has launched its Vision 2023 plan and set a budget of 12 billion yen for mergers and acquisitions in the medium-term.

On the M&A side of the coin, the company says the aging population in Japan means there are many companies without successors to take over the reins once the current generation has retired.

Nishio Rent All booms at its yard. Nishio Rent All booms at its yard.(Photo: Nishio Rent All)
Nishio’s growth strategy

Another aspect of the vision is to refocus the company’s rental model.

“Firstly, we will establish a system in which machines are managed at centres located in each local area as much as possible, because we consider the rental side of the business to be part of the logistics industry, and we believe that thoroughly reviewing our distribution system will improve its profitability,” says the company.

“Certainly, we will grow our rental fleet as much as possible because we expect growth of the construction market from now on.”

This will also include increased capital investment in the access fleet. “We’re investing in access equipment because a lot of redevelopment projects and logistics warehouses have been starting in Japan.”

The only problem being, “The delivery period has been delayed because the parts supply for the access equipment delivered from factories in Southeast Asia has been delayed due to Covid.”

In another plan for this year, the company will make proposals to contribute to the International Expo, at Kansai Expo in 2025, Osaka, with the theme of sustainability.

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