Takeuchi Makes Big Plans for U.S. Construction Equipment Market

Bryan Furnace (00:09):

Today we're here to talk about Takeuchi. If you're familiar with large CTLs in the market, chances are you've heard of Takeuchi. They're a pretty large brand out there and they've made some really solid machines.

(00:21):

Today Justin joins us to talk about what they have coming down the pipeline and what you can expect from Takeuchi in the future.

(00:30):

Well, Justin, thank you so much for being on the show and taking time to be on The Dirt today.

Justin Smith (00:34):

Hey, you're welcome. Thanks for having me.

Bryan Furnace (00:36):

So the first question I've got for you is we've all come to know that Takeuchi acquired the old Kobelco plant within the last year or so. What does that really look like for Takeuchi and what do they intend to do with that facility? How's that going to benefit us as end users here?

Justin Smith (00:50):

Man, I'd say that it's opened up a world of possibilities for us. We're going to have faster delivery to our dealership network and our customers in the near future. Our goal is to have all track loader production coming out of that facility.

Bryan Furnace (01:03):

Wow.

Justin Smith (01:03):

So not only is our R&D and all that going to be here in the US, we're also bringing around 300 jobs to South Carolina. So we're really, really proud of that.

(01:12):

To add onto that, we're also bringing the quality that Takeuchi's always been known for, brought into the American market and out of that factory. So we're really, really excited about all the possibilities that it opens for us.

Bryan Furnace (01:23):

So you guys will officially be manufacturing skid steers here in the US borders?

Justin Smith (01:30):

Yes. Currently, we are doing partial assembly, so we're bringing the units in running. We're doing final assembly there in the South Carolina plant, mounting cabs, doing painting, decals, quality checks.

(01:43):

We're getting a lot of those elements in place to go to full production in the near future. There's a lot of sourcing that has to be done, a lot of other activities that are behind the scenes that we're trying to get accomplished. But we are bringing track loaders and have been bringing track loaders out of that facility already this year in 2023.

Bryan Furnace (02:04):

Awesome. So any idea or can you even share roughly ballpark when that facility will be fully operational and in full swing?

Justin Smith (02:13):

You know, I can't really say a definite date. I think we've got some targets in the next few years to do that.

(02:18):

But I can tell you from working with Takeuchi for a number of years, we will not do anything too quickly or come unprepared to the table. So everything is going to be right and in place before we do full production out of that facility.

(02:32):

Again, we've got a big name to live up to as far as quality goes, so we are not going to do anything too rash. But I am glad that the train is moving in that direction, so to speak.

Bryan Furnace (02:42):

Yeah, absolutely. So with all of that being said, any new models of machines that Takeuchi has coming out that we should be aware of on the front lines?

Justin Smith (02:51):

Yeah, absolutely. Very excited. We are getting into the reduced tail swing market on excavators for the first time ever. We've always predominantly been conventional tail swing. Now we've come out with a three and a half metric ton excavator, the 335R, both in canopy and cab units and the 350R, which is a five metric ton excavator in reduced tail swing.

(03:12):

Also, some other new products you might want to look for in the next year, we are going to try to bring a tracked dumper to the market. Not a lot of information on that unit just yet, but that will be coming probably in the next year or so. Also, a nine metric ton wheeled excavator. So we're branching into some new areas in excavators that we haven't been before.

(03:31):

And also I would look for a new generation for track loaders coming in the near future as well. We're already working on some of those designs.

Bryan Furnace (03:37):

Excellent. So for those of the audience that aren't super familiar with your product lineup, what's your kind of size range currently on your excavator line?

Justin Smith (03:48):

So currently, we go from one metric ton up to around a 34,000-pound machine, and that's our current lineup. I don't think we'll see anything bigger than that 34,000-pound machine. We like to kind of stick with what we're good at, which is what we consider the compact excavators.

(04:04):

You know, Takeuchi was the very first compact excavator to the market in 1971, and we were also the first compact track loader to the market in 1986. So again, we like to kind of stick with what we're good at, but that's our current size ranges.

Bryan Furnace (04:16):

I am curious, you guys have had a monstrosity of a machine on the market for a while now as far as your CTLs go and the market is starting to respond to that. You've seen John Deere come out with larger machine, Case has come out with a larger machine now.

(04:32):

Do you kind of foresee the industry continuing to increase the size? Or do you think we've kind of gotten to that point where CTLs have kind of maxed out where they kind of stop and we start moving over into like the loader market?

Justin Smith (06:13):

You know, that's a tough question, for sure. I think as far as could we as a manufacturer go bigger on our track loaders, we're already at 111 horsepower on that TL12.

Bryan Furnace (06:23):

It's a monster.

Justin Smith (06:24):

It is a monster. You get up into something bigger than that, your towability, as I always call it, is restricted. It creates a bigger machine on a job site, takes up more room and I think kind of takes the compact word out of the equation.

(06:38):

So do I think we could go bigger? For sure. I do believe there's going to be a point where ourselves and other manufacturers are going to be like, "You know what? We're venturing into some areas where maybe we should just cut it off." But I could foresee us going a little bit bigger than the 12.

(06:52):

However, from our customer base, we don't get a lot of feedback that that machine is not enough. Generally, I would say that our machines are under spec, in a way. They do a lot more damage than what the customer expects them to do out of the gate. So yeah, I think we could go bigger, but I think right now we're trying to perfect on the product that we have currently.

Bryan Furnace (07:11):

I have always been a huge fan of the Takeuchi machines and like you said, I agree. I think you guys kind of undersell the performance of those machines. I've always been really blown away at the performance once you jump into them.

(07:22):

But that being said, there was a pretty good stretch there where your skid steer line, in particular, had some pretty well-known emissions issues. And as a Takeuchi fanboy, I have to know, have those largely been straightened out? Where do we kind of stand?

Justin Smith (07:37):

Yeah. I mean, I think all the manufacturers in general had some emissions issues. I think ours-

Bryan Furnace (07:42):

Absolutely.

Justin Smith (07:42):

... stemmed from some supplier issues that we had and we got a lot of those corrected as quickly as we possibly could.

(07:48):

I think the general consensus among our user base and the construction market today is people are understanding the emissions better than they did when we first started this several years ago. So I think we've got a more educated customer base. I think the customers understand that you need to run those machines hard, run them full throttle as much as you possibly can, and a lot of that will go into better care of the machines and more control over having failures of the emission systems due to soot buildup or anything like that.

(08:16):

But as far as us, we have conquered any issues that we had. We still have one [inaudible 00:08:22] one-off issues. I always say it's a machine. There's things that can go wrong, no matter what.

Bryan Furnace (08:26):

Absolutely.

Justin Smith (08:27):

But I would say overall in the market, our quality is second to none and we have what I would say a cult following on the internet and everywhere else that basically talks about all of our quality of our machines. So yeah, I think we try to get in front of any problems that we have and not let them turn into a forest fire, for sure.

Bryan Furnace (08:44):

I couldn't imagine being a manufacturer in the time period where we switched from pre-emissions to slapping all of this emission stuff. Because, first of all, the industry itself was trying to figure out how to implement this technology in real time, on the fly, while also having to encounter all of the errors and fix them on the fly because there wasn't really a learning curve.

(09:03):

Then you have on top of that, you have suppliers that are trying to figure out how to manufacture these components on the fly.

(09:10):

And then you have that third kind of piece of the pyramid that you stated, which is customer education. You can't run a post-emissions machine at idle or low RPM and a lot of the industry got these machines, ran it like they'd always run their skid steer, thinking that they were sipping on fuel and, in reality, they're just filling those DPFs and their SCRs up with all of the soot and everything.

(09:34):

And so I feel the struggle there. I can't imagine what that was like as an OEM trying to work through that.

Justin Smith (09:41):

Well, and I think from our standpoint, the majority of our customers are owner-operators or that's who we generally target.

(09:48):

You know, I grew up in a family of owner-operators. When the machines are down, we're not making money, we're not feeding our families. And from a manufacturer standpoint, I know that hits pretty hard to me as a factory representative.

(09:59):

And so, again, we try to be as helpful as we can to our customer base and try to be more partners with them than anything because we want to keep our customers on the job sites making money and feeding their families as much as possible.

Bryan Furnace (10:11):

Awesome stuff. Well, Justin, thank you for all the information. I appreciate it.

Justin Smith (10:14):

Hey, I appreciate you having me on the show. Thank you very much.

Bryan Furnace (10:17):

Well, thank you again for Justin for coming on the show and giving us a little bit of insight as to what Takeuchi's up to and what to expect in future models. And I will say it's absolutely exciting to see yet another brand start manufacturing here in the US.

(10:31):

So that being said, as always, I hope this helps you and your business. We'll catch you on the next episode of The Dirt.