NEWS AFTERMARKET 11 Nov 2015

Komatsu Finance: Helping Fund the Machines that Build and mine Australia

OUR DIRECTIVE OVER THE NEXT COUPLE OF YEARS IS CUSTOMERS, CUSTOMERS, CUSTOMERS

komatsufinance_image-(1).jpgOn 1 April 2015, Komatsu Finance, Komatsu's in-house vendor finance company, celebrated 20 years, having delivered over $A2 billion worth of financing for equipment to owner operators, contractors, plant hirers, quarries and mines throughout Australia and New Zealand.

In marking this milestone, Yoshi Maeda, Managing Director of Komatsu Finance said the main purpose of Komatsu Finance had always been to support and expand the sales of Komatsu equipment in Australia and New Zealand.

"We also aim to enhance the reputation of Komatsu in the Oceania region," he said.

Komatsu Finance's approach is to ensure that Komatsu is easy to deal with for customers by offering a "one-stop-shop" solution combining machinery sales, support and services with a range of financial services.

In this regard, Komatsu Finance quickly proved itsworth to customers and Komatsu Australia, said Sean Taylor Managing Director & CEO of Komatsu Australia.

"Komatsu has been very pleased with the supportwe've always had from Komatsu Finance, and it has aided us in securing some very important sales over the past 20 years," said Sean.

"It is also a relationship that has worked seamlessly to add value to Komatsu's customers.

"I am always advocating the benefits of Komatsu Finance when appropriate to the customers I meet,and emphasise to our sales staff that KomatsuFinance is an ideal option for prospective purchases.

"And in these more challenging economic times, we appreciate Komatsu Finance's more than ever," he said.

According to James Dwyer, General Manager, Business Development with Komatsu Finance, the business was established as Komatsu AustraliaCorporate Finance Pty Ltd, initially providingfinance to major resources projects looking to gearup their operations.

"This proved a very attractive offering for customers, and Komatsu Finance was able to finance a significant number of Komatsu mining fleet sales to mining companies and mining service providers throughout Australia," he said.

As a result of this very successful program, Komatsu Finance's operations were then expanded significantly to cover sales of construction and utility equipment.

"In October 2004, Komatsu Finance began appointing business development managers in each region to target Komatsu's small-to-medium customers.

"These covered those Komatsu customers who typically purchase just one or two machines at a time, through to mid-sized civil construction companies buying fleets of 10, 15, 20 machines," said James.

"Since then, the proportion of our book in terms of numbers of units has become far higher for those smaller customers, with our average deal size being around $200,000."

Currently around 50% of Komatsu's new equipment sales in Australia and New Zealand are funded through Komatsu Finance, but the business is looking to increase that percentage.

"Our short-term goal is to get to 60%, but our longer-term aim is to equal our Komatsu peers in other parts of the world where up to 80% of sales are financed through Komatsu Finance," James said.

The mix of industry sectors serviced through Komatsu Finance has also changed significantly over the past few years.

"Since we expanded the business to include more SME customers, mining has typically dominated in dollar terms to be over 75% of our business," he said.

"Now it's closer to 60/40 between mining and construction/utility and, looking to the next few years, we believe construction and utility equipment sales will account for as much as 90% of our business."

Komatsu Finance is looking to further build its share of Komatsu equipment sales that it finances, by developing its ease-of-use approach and by leveraging its in-depth understanding of the construction and utility sectors, James said.

"We have built a reputation in the marketplace for being easy to deal with, because we understand our customers' businesses, and the challenges and constraints they frequently face.

"We know the function and role of each piece of equipment in Komatsu's lineup, and how they help make customers more competitive and efficient.

"We're now working to make it even easier for customers to deal with us," he said.

"We're revisiting our credit policy and processes to streamline our business procedures, and we're automating the way we handle our credit andcompliance requirements, to make it much easier and faster for us to process a detail.

"And we will shortly invest in the latest mobile technology for our business managers so thattheir dealings with customers can be made even more efficient.

"Our directive over the next couple of years is customers, customers, customers.

"We anticipate that once we sign up a customer to Komatsu Finance for a machine purchase, their experience tends to be positive, and we hope that as a result, they will finance their next machine, and the next, and the machine after that with Komatsu Finance," said James.


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