SmartEquip launches in Japan
By Murray Pollok23 September 2021
SmartEquip has launched its parts e-procurement network in Japan through a partnership with Tokyo-based Diamond Construction Equipment Corp.
Diamond is co-owned by the four largest Japanese equipment rental companies and Mitsubishi Corp. It provides long term re-rentals of excavators in Japan and other services, including transport logistics, and now also SmartEquip technology. The four rental companies are Nikken, Aktio, Nishio Rent All and Kanamoto, which together account for more than 35% of the Japanese market.
SmartEquip said it was fully operational in Japan, with a growing number of local suppliers having gone live, and with one unnamed major Japanese rental company in the pilot phase.
The two companies finalised the partnership in March of 2020 and since then have internationalised and commercially launched the platform.
The Japanese suppliers already on the network have not been named, but IRN understands that they include major excavator OEMs such as Kobelco, Hitachi, Kubota, Yanmar and Sumitomo. They join the equipment manufacturers in North America and in Europe already on the system.
SmartEquip’s e-procurement platform supports more than US$1 billion in parts transactions annually, connecting 600 OEM brands with 95,000 rental company users and 42,000 equipment locations worldwide.
“SmartEquip has long sensed tremendous opportunity in Japan,” said Alexander Schuessler, SmartEquip’s founder and President of its International Group.
“Rental penetration rates are very high, equipment ownership runs long, and operational efficiency and equipment lifecycle management improvement have a monumental impact on profitability – both for rental companies, as well as the manufacturers who supply and support them. These factors together represent the perfect setting for our value propositions.”
Tatsuo Miyazawa, CEO of Diamond Construction Equipment, said the company was very pleased to be bringing the SmartEquip technology to Japan; “Rental companies in Japan have long known that technology can improve profitability by reducing labour costs and by increasing the financial utilisation of equipment.
“It is exciting to be able to launch these opportunities for profitability in our market, and to do so with an elegant technology solution that is both easy to implement and very user friendly. We thank SmartEquip for our partnership and look forward to expanding this footprint very quickly together over the next couple of years.”
Schuessler told IRN that the deal provided a unique opportunity, given the nature of the Japanese market; “First, rental penetration is higher in Japan than in any of the other markets SmartEquip is currently active in – above 80 or even 85%, compared to the approximately 50% in North America.
“Second, compared to their European and North American counterparts, rental companies in Japan hold on to their equipment a great deal longer – often as much as 7-10 years. As equipment ages, its service and parts cost increases at an accelerating rate.
“Therefore, the average parts and service component of total equipment lifecycle cost is quite a bit higher, too. This means the potential impact of SmartEquip on reducing total cost of ownership is significantly more substantial as well. Japanese rental companies and their suppliers stand to benefit from substantial increases in overall profitability.”
The deal also gives SmartEquip a presence in a major rental market; “The size of the global rental industry is estimated to approach $150 billion in the coming years. Approximately $70b is for North America, and most of the rest is divided between Europe and the Asia Pacific (APAC).
“We have been active in Europe for almost 10 years and are continuing the rapid growth of our footprint there. And regarding APAC, Japan represents a unique, especially rental-intensive starting point for us in that part of the world, especially given the partnership we have been able to build.”
SmartEquip said it entered into the partnership agreement with Diamond in the first quarter of 2020 and has worked with the company for three years to forge a strategy for Japan.
“It is extremely gratifying to witness the SmartEquip Network commercially operating in Japan and to see a daily increase in the number of orders running through our platform”, said Schuessler.
“We thank the Diamond team for the close partnership we were able to build together, for the vision we jointly formed for this industry, and for the learning our two companies experienced, both together and from one another.”