Wacker Neuson and John Deere sign excavator agreement
14 June 2022
Wacker Neuson is to manufacture mini and compact excavators under 5 tonnes for John Deere under a long-term manufacturing agreement that will also see John Deere develop and manufacture 5 to 9 tonne excavators using designs acquired from Wacker Neuson.
The Germany-based OEM will produce the sub-5 tonne excavators at its facilities in Menomonee Falls, USA, and Linz, Austria for John Deere, mainly for North America.
The machines, including electric models, will be distributed under the John Deere brand through John Deere’s global dealer network.
Wacker Neuson machines in the same range will continue to be distributed under the Wacker Neuson brand through its own network.
The agreement, which is for an initial 13 year period, follows the ending of John Deere’s joint venture with Hitachi, which included a cooperation on mini excavators in North America. Deere sells around 15,000 minis a year in North America.
The deal also expands on the existing relationship between the two companies. Wacker Neuson has built Deere-branded compact excavator models up to 7.5 tonnes in China since 2018. These models are mainly sold in China and Australia.
Wacker Neuson’s Kramer-branded telehandlers and wheeled loaders are sold through John Deere agricultural dealers in Europe and Australia under a strategic partnership.
Wacker Neuson said its was confident the agreement will “substantially accelerate the Group’s profitable growth trajectory in the medium term”, although it does not expect significant sales and profits in the first three or four years. Wacker Neuson will invest low double-digit million euros to expand production capacity.
Dr. Karl Tragl, Chairman and CEO of Wacker Neuson, said; “We are very much looking forward to adding another layer to our growth strategy through this OEM agreement with John Deere for mini and compact excavators.
“Our relationship with John Deere has been a successful collaboration that spans many years in both the agricultural and construction sectors. Our product and manufacturing excellence complements John Deere’s established market reach in North America to open up outstanding business opportunities in the attractive mini and compact excavator market segment,”
For John Deere, Domenic Ruccolo, SVP for Sales, Marketing, and Product Support for Global Construction Equipment, said excavators were integral to its customers’ jobsites and it anticipated that demand would continue to grow; “As we look to the future of our excavator line-up, this agreement will allow us greater flexibility as we continue to deliver a robust product portfolio that prioritises the operator experience.”
Alexander Greschner, Wacker Neuson’s Chief Sales Officer, told International Rental News that the agreement would accelerate Wacker Neuson’s business expansion in North America, giving it the volumes required to invest in production capacity in the USA and also boosting volumes in Austria.
The 1.5 and 2.5 tonne models for John Deere will be build in Europe, with 3.5 and 4.0 tonne machines made in the USA.
Greschner added that the agreement will give it production capacity for the core mini excavator sizes in each of the three main regions: North America (3-4 and 5 tonne), Europe (1-2 tonne) and China (6 tonne) - the latter already in operation through the deal with John Deere in China and Asia Pacific.
The cooperation will be phased in over time, model by model, as the joint venture with Hitachi runs out. The small European-made minis will be available by 2024, with the bigger US-made models in the following years.
“It means that in North America we will not only be growing organically or incrementally”, said Greschner, “The day it switches on, it switches on with volumes. We will have to produce some thousands of machines in the first year.”
Wacker Neuson previously manufactured mini excavators for Caterpillar for 10 years. The end of that agreement was announced in 2018.