Flexible equipment leasing: foundation for China’s future growth

Industry: Construction
Customer story

Charline Zhang, DLL (left) with Richard Li, Bauer Group (right)

The Bauer Group, a global specialist in foundation engineering, entered the Chinese market in 1992. Since then, Bauer machinery has laid the foundations for some of the world’s tallest buildings and biggest dams. To lay a firm foundation for its own future growth in a strongly fluctuating market, the Bauer Group teamed up with finance solutions partner DLL.

Global specialist in foundation engineering
As China’s growth continues to stagnate, so does its market for large-scaled infrastructure projects, which are the bulk of Bauer’s business in China.

“Excavator sales are a key barometer of the construction machinery industry,” says Richard Li, Bauer Group Sales Director. “The market has dropped dramatically after peaking in 2008. Piling equipment sales have declined even faster.”

Companies don’t dare to buy new machines without enough work in sight. Our challenge has been figuring out ways to get equipment into their hands when they are dealing with temporary cash flow issues. "
Customer story

Shifting tactics
These dramatic drops have affected customer confidence, which according to Li is also at a record low. “Companies don’t dare to buy new machines without enough work in sight. Our challenge has been figuring out ways to get equipment into their hands when they are dealing with temporary cash flow issues.”

To meet this challenge, last year DLL introduced a creative rental program that allowed customers to try equipment before buying and build up equity during the rental period. “By renting first they can immediately earn income from the equipment and better understand the value of investing in it,” says Charline Zhang, DLL Sales Manager for the Construction, Transportation and Industrial sectors in China.

With rent and equipment leasing sales accounting for roughly 40% of Bauer’s market demand in China, giving customers more flexibility during the first six months after delivery makes a real difference.

Building value with construction finance
The two partners have worked together to define other innovative equipment leasing tactics, such as lowering the minimum down payment to 20% and shortening the credit audit process to speed up delivery. All while maintaining quality and mitigating risk.

“The real value of DLL’s involvement is that it allows us to leverage financial tools to increase our customer base and market share,” adds Li.

DLL China’s finance penetration has grown from what was initially 10% to a record 88%. "
Customer story

Mutual strengths
According to Li, Chinese customers invest in machines only after they’ve secured a contract. This means that the companies that respond fastest usually get the business. 

“DLL is excellent in this regard,” says Li. “They respond to our customers’ requirements faster than other leasing companies. They also have a clear ability to build strong relationships. Charline Zhang is close to our global and Far East teams, and DLL’s sales people understand our sales force. When our salesmen have a lead for financing options, their first call is to the DLL Program Manager.”

Li says, “By combining our exceptional equipment and services with DLL’s outstanding market intelligence and knowledge in China, we have been able to steadily increase our business volume. In fact, DLL China’s finance penetration has grown from what was initially 10% to a record 88%.”