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Mood Upbeat at GIE + Expo as OPE Industry Looks to 2010
John Dobberstein, Associate Editor
LOUISVILLE, Ky. (Nov. 6, 2009) — While attendance was down from previous years, exhibitors at the 2009 GIE + Expo at the Kentucky Exposition Center seemed generally upbeat about sales prospects for 2010.
Many manufacturers and industry leaders at the conference, held Oct. 29-31, believe landscapers and consumers are looking to purchase new equipment after a few years of getting by with what they already own.
Manufacturers like Ariens, Stihl, Dixie Chopper, Toro Co., Scag and Husqvarna unveiled
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| Many exhibitors at the 2009 GIE + Expo in Louisville, held Oct. 29-31, said they still have a positive outlook for equipment sales in 2010, despite the difficult economy. |
new electric, propane and battery-powered products and continued efforts to capitalize on the emerging market for “green” or fuel-efficient equipment.
During a panel discussion on the trade show’s second day, Dan Ariens, president of Ariens, said outdoor power equipment industry has sunk into its longest decline in 25 years, but he sees some signs of an upturn.
Stihl President Fred Whyte noted that business productivity in the U.S. was up in the third quarter of 2009. But he also discussed a recent Wall Street Journal report about the depth of the current recession, which the newspaper says forced 4.3 million businesses with 19 or fewer employees to close between the fourth quarters of 2007 and 2008.
Even though Stihl has seen many consecutive years of record sales, Whyte said the company has many younger managers who haven’t gone through such an industry crisis. “Last year I said they should sit down with their CPA and get real warm and fuzzy because he or she could be their best friend. What is your contingency plan? What actions are you going to take? Make your banker your next best friend.”
Some companies, like Pennsylvania-based Turf Teq, are bucking the trend and planning continued growth in 2010. The company is scrambling to fill orders for its snow removal equipment, which sold very well this year after big snows in Indiana, Ohio and New England.
Turf Teq’s power brooms have become popular with college campuses and transit authorities in metropolitan areas, says general manager James Day. The company’s market is nearly equally split among rental, commercial and municipal markets. “You can take everything you’ve learned and throw it out the window,” Day says of the coming sales season. “The thing we’re trying to sell to customers is that our equipment can save you money. It can pay for itself in less than a year.”
Other manufacturers, especially those tied to the slumping construction market, are not so confident. “We think it’s going to be a tough year, with no real big jump in sales,” says Tanner Schilke, a field product representative for Bobcat, which featured its upgraded M Series skid-steers at the show.
Tom Oechsner, marketing specialist for Wisconsin-based mower manufacturer Scag, says demand for products is “slowly starting to ramp up. We’re seeing more activity and we’re always looking for more quality dealers.”
Officials from Kawasaki Engines & Power Products told Rural Lifestyle Dealer the company is boosting its branding efforts and exploring the market for ‘prosumers’ – residential customers who like buying higher-quality equipment similar to what professional landscapers use. “I think there will be slow, steady growth,” said Rodger Howe, director of operations. “As we’ve talked to dealers, everyone seems fairly positive. But it will take more time to recover.”
Wisconsin-based Briggs & Stratton, the maker of gas engines for outdoor power equipment, was hit hard by the housing market slump and the company announced job cuts and plant and warehouse closures effective for 2010.
But at GIE the company discussed its new engine technology for professional products and unveiled many new models of zero-turn, walk-behind and riding mowers under the Simplicity, Snapper, Ferris and Snapper Pro brands. Briggs & Stratton also announced a revamped classification system for the company’s 15,000 dealers across North America.
In fact, Briggs & Stratton is still predicting an increase in sales of walk-behind and riding mowers in 2010.
“Inventories are lower. I think our dealers have gone through an inventory correction period,” says Todd Teske, the company’s president and COO. “We’re waiting to see how consumers respond now to purchasing the big-ticket items. New products will be really important to us this year to drive customers in to our dealerships.”
Agri-Fab, an Illinois maker of lawn-and-garden tools, attachments and snow removal equipment, saw revenues and profits grow in 2009, and 2010 should be another good year, says Mark Short, vice president of marketing and product development. He says Agri-Fab thrived by reinventing “stale, non-innovative” attachments.
Short says Agri-Fab has also designed new product displays to help dealerships communicate the usefulness of the attachments to end-users without taking up valuable floor space.
Outlook for 2010
GIE’s second day kicked off with an “Inside the OPE Industry” discussion with Ariens and Whyte. Both said consumers are being affected not only by joblessness, but a shortage of credit that thwarts purchases of big-ticket items. Tight credit is also affecting many equipment dealers.
Ariens said his company is budgeting conservatively, planning for worst-case
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| Stihl President Fred Whyte (left), Ariens President Dan Ariens (right) and OPEI President Bill Harley talk about the market for equipment sales going into 2010. |
scenarios and looking to new products — like a snow-thrower, walk-behind and riding mower with electric power — to bring in new customers. He sees inventories at dealerships dropping and dealers getting smarter about floorplanning.
“Even with the high unemployment rate, people need to maintain their real estate because it’s their biggest asset,” Ariens said. But he cautioned that trillions of dollars in consumer debt “must unwind itself,” and that many banks have a long way to go before they’re healthy again.
Stihl has been cutting costs and inventories to get in line with customer demand, and “the next shoe to drop” is commercial real estate, Whyte said.
On the positive side, he’s hearing from dealers that repair sales are up. “Until we get consumer spending going, it will be a hard recovery,” he said.
Whyte’s advice to equipment dealers? “It’s all about relationships. Have a written business plan. Bankers like things like that.”
