Wacker Neuson to build mini excavators for Deere
By Murray Pollok and Jenny LescohierJune 15, 2022
Just months after ending its decades-long joint venture with Hitachi, John Deere has now turned to Germany-based Wacker Neuson for design and manufacturing of mini excavators under 9 tonnes for North America.
Under the new agreement, Wacker Neuson will manufacture machines under 5 tonnes for John Deere at its plants in Menomonee Falls, WI and in Linz, Austria. The 5- to 9-tonne excavators will be developed and manufactured by John Deere using designs acquired from Wacker Neuson.
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.
Gert Reichetseder, president and CEO of Wacker Neuson America Corporation, said the two brands will have the same base machine, but of course each company will put their stamp on the design.
“The idea is to utilize synergies and economies of scale,” he stated. “We’ll have the same base machine, but whatever technology options Deere adds to their machines will differentiate them.”
When asked why he thought Wacker Neuson was Deere’s choice for the partnership, Reichetseder said the company’s product portfolio is unique and there aren’t many others that can offer the same manufacturing footprint in that size range.
“It’s a compliment and it tells us we’re doing something right,” he said. “On the other hand, it helps us here in the Americas to speed up our strategy to bring excavators over here. It makes us more professional in the fastest way.”
Reichetseder said he expects Wacker Neuson will double its production workforce in Menomonee Falls by 2025 as a result of the new partnership.
Deere begins new era with Wacker Neuson
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. Compact equipment specialist 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 wheel 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.
“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,” said Dr. Karl Tragl, chairman and CEO of Wacker Neuson.
“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, senior vice president of sales, marketing, and product support for Global Construction Equipment, said excavators were integral to its customers’ job sites 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 prioritizes the
operator experience,” he said.
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 U.S. and also boosting volumes in Austria.
The 1.5- and 2.5-tonne models for John Deere will be built in Europe, with 3.5- and 4.0-tonne machines made in Menomonee Falls.
Greschner added 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 U.S.-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.