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NMHG opens door to dual-brand dealers


Thursday, 13 Aug 2009 ( #423 ) - Greenville, NC, United States
News Story
Nacco Materials Handling Group Inc (NMHG) is moving toward selective geographic dealership consolidations in North America for its Hyster and Yale brands.

On 1 August , Arnold Machinery Co became the authorised dealer for Yale materials handling equipment  for all of Colorado, Utah and Wyoming and portions of Nevada, Idaho, Oregon and Arizona, says Colin Wilson, chief operating officer and president, Americas for NMHG in Greenville.

Arnold purchased the Yale business from H&E Equipment Services Inc of Baton Rouge, Louisiana (Forkliftaction.com News #420).

Arnold began representing Hyster in 1944.

There are 25 Hyster and 42 Yale independent dealers in the US and Canada, Wilson says.

Now, only Arnold is authorised in North America for both brands.

"We have communicated with our North American dealers that, under controlled conditions, NMHG will consider one dealer or ownership group to represent both of its brands in defined territories," Wilson says. "This policy change was made following considerable consultation with our dealer networks in North America. All dealers in North America were part of this consultation process." Serious discussions started in December and January.

The policy change is "a move by us to strengthen our distribution network", Wilson says in an interview. "It is not something dealers are required to do" but something NMHG may allow between a willing buyer and a willing seller.

Parent firm Nacco Industries Inc mentioned the policy change in its 5 August second quarter financial release.

NMHG will continue to have single-line dealers. "We have the best dealer networks in the industry, and our goal is to strengthen these networks even further, whether through having dealers representing Hyster products only, Yale products only or dealers representing both brands and products," Wilson reports.

NMHG expects to consider other dealer consolidations "as appropriate opportunities present themselves", he says. "We have no fixed timing, and we do not have a pre-determined number of dealers that we believe could end up representing both Hyster products and Yale products."

NMHG plans to continue full product lines for both brands "to serve the needs of all customers based on their preference", Wilson notes. The NMHG agreement for dual-brand representation in a defined territory obliges dealers to have separate sales consultants for the Hyster and Yale products and to meet market penetration goals for both brands.

Some observers wonder whether too many dealers and too many brands are chasing too little forklift business.

"We do not necessarily see saturation of brands or dealers in North America, but we do believe all dealers should be structured to best meet the needs of customers in the most cost-effective way possible," Wilson responds. "Exclusivity in a total relationship between a dealer and a manufacturer benefits the dealer and the customer, and we remain committed to that principle."

NMHG is holding "discussions to fill some areas around the edges" of the Arnold territories, Wilson says. "For some open territories, we will appoint dealers in due course."
Noting comments on the Forkliftaction.com Discussion Forum and other venues, Wilson comments: "There are a lot of rumours out there. It is amazing how expert some people think they are."

Others in the forklift industry provide viewpoints.

Having Arnold represent both Hyster and Yale in the Rocky Mountain region is "healthy for the industry", says John Faulkner, president of FMH Material Handling Solutions Inc. "That is one less competitor I need to compete with in the state of Colorado." Denver, Colorado-based FMH represents the Big Joe, Caterpillar, Clark, Doosan, Donkey, Heli, JLG, Linde, Mast Explorer, Sellick and SkyTrak brands.
The president of another materials handling equipment competitor in the Arnold territory says the dealership combination of the Yale and Hyster brands in the Rocky Mountain territory is "just a natural attrition in the business world".

NMHG says its 81 Hyster and 68 Yale independent dealers in North America and South America had a 23% marketshare in 2008.

In Europe, Hyster had 63 independent dealers and Yale had 111. For the Asia Pacific, Hyster had 15 independent dealers, and Yale had 10. NMHG says its worldwide 2008 market share was 9%.

NMHG Holding Co is a subsidiary of publicly traded Nacco Industries of Mayfield Heights, Ohio and, through NMHG, designs, engineers, manufactures, sells, services and leases forklifts and aftermarket parts under the Hyster and Yale brand names.

In its August news release and analysts’ conference call, the parent firm discussed results for the second quarter ended 30 June.

On amounts attributable to stockholders, the NMHG Wholesale segment reported a net loss of USD1.3 million on sales of USD342.7 million versus profit of USD3.2 million on sales of USD742.4 million for the comparable 2008 quarter. The firm says global market levels for forklifts "appear to have stabilised at current low levels".

The NMHG Retail segment lost USD1.8 million on sales of USD19.3 million compared with a loss of USD0.6 million on sales of USD25.1 million for the 2008 quarter. For the retail business, "if economic conditions in the United Kingdom and Australia remain low or continue to deteriorate, sales of units, parts and service are likely to decline further," Nacco says.
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