Komatsu Forklift to discontinue Tusk brand of lift trucks

Komatsu Forklift U.S.A. recently announced its decision to discontinue the sale of the Tusk brand of lift trucks as of July 31, 2010. Last year, Komatsu was ranked No. 8 on Modern
's list of top lift truck suppliers, reporting $1.15 billion in worldwide sales in 2008. But, all companies, even the top ones, are being affected by this bad economy. 

“This was a difficult, but necessary, strategic decision for Komatsu Forklift,” said Akira Yamakawa, Komatsu's president. “For a number of years, Komatsu Forklift has been manufacturing forklift products under both the Tusk brand and the Komatsu brand and maintaining separate channels of distribution for each. The prolonged tough economic conditions required us to closely examine doing business in this fashion. After careful consideration, we have decided to discontinue the Tusk brand in order to be able to focus all of our resources on our core Komatsu brand. We believe that focusing on a single brand and a single channel of distribution will result in increased efficiencies and cost savings and represents the better strategy for achieving long-term growth and profitability for shareholders.”

Only five years ago Komatsu added Tusk to its line. Its goal at the time was to revamp the company's dealer support system. Dealer development manager Tom Thomas was quoted as saying, “The era of superior dealer support is here, and we are committed to putting resources behind the Tusk brand.”    

Then, less than one year ago Komatsu announced the consolidation and restructuring of its North American manufacturing operations. Komatsu's forklift production operation was moved from Covington, Ga., to Komatsu's Newberry Manufacturing Operation in Newberry, S.C. The company said the move would allow Komatsu to take advantage of available synergies, reduce overall operational expenses, and more effectively utilize assets.

Putting the Tusk announcement in this context, dealers will also have to be thinking about more effectively using their assets. That might mean filling out product offerings with lines they'd never considered before. Last year Jungheinrich's Class 1, 2, and 3 lines were added to Mitsubishi dealers' Class 4 offerings. The ability to offer customers one-stop shopping is the goal. One-brand allegiance is not always compatible with that goal. Dealer exclusivity is starting to go away, at least among the smaller dealers.

Ken Van Hook, president of Safe-T-Consultants in Humble, Texas, used to be manager of Mitshubishi Caterpillar Forklift America's (MCFA) product safety standards group. He has keen insights into the implications of the Komatsu announcement for dealers and customers.   

“If I'm a dealer selling the Tusk brand, now my local CAT dealer who had a brand equal to that has an opportunity to say 'Do you really want a dealer who wants to sell you a Daewoo here and a Komatsu there? You won't know what he'll be offering next year.' This is an opportunity for the smaller guys to mass together and offer brands across the board. That means an OEM from China could come in and make a killing right now. If they don't, the big boys will take their business away.”

Deals are being made today for tomorrow's business. You can bet Komatsu will be fighting to stand their ground in the Top 10. But don't be surprised to see some new players challenge their position.