Former CNH executives send ‘disruptor’ warning

Construction is grappling with the challenges of digitisation, autonomous operation and electrification, creating an opportunity for new players to emerge

Construction equipment manufacturers should be prepared for a disruptor to enter the market in the same way that Tesla has impacted the automotive sector, according to former CNH Industrial executives Carl Gustaf Göransson, who was Global President Construction, and Alan Berger, a past Chief Technology Officer.

The two - writing on the International Construction, Construction Europe and International Rental News websites - acknowledge that existing OEMs have “extensive product, customer and application knowledge. But given the technical changes that are coming, is that going to be enough to save them from a digital disruptor?”

Göransson and Berger, who are currently working as consultants, said the industry was already grappling with the challenges of digitisation, autonomous operation and electrification, which created an opportunity for new players to emerge.

They argue that existing OEMs are best placed to withstand disruption when it comes to products and supply chains – leveraging their knowledge and well-established supplier relationships - but are more vulnerable in areas such as distribution, parts and service, and access to capital.

“A disrupter could build a service-only network, leveraging established dealers while moving most of the sales activity on-line”, they write, “This is difficult for existing OEMs and therefore the newcomer has an edge.”

With capital, existing OEMs have to balance R&D, capital expenditure and operating income; “Not so start-ups, whose compelling business models and few external dependencies can get access to significant capital.”

They conclude that existing OEMs could drive disruption themselves if they commit to the complete transformation needed; “But, if none do so, don’t be surprised if someone else decides to do it for or to them.”

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