The deal follows Deere and Hitachi ending their joint venture in March to produce and market excavators for the Americas.
The long-term exclusive supply agreement between Deere and Wacker Neuson covers compact excavators weighing less than 5 metric tons, including battery electric excavators sold in North America. Deere will also develop and manufacture 5- to 9-metric-ton excavators that incorporate designs from Wacker Neuson.
The deal will strengthen both companies’ positions in the compact excavator market across the world, they say.
In 2018, the two companies entered a similar agreement for the Asia-Pacific market. For that region, Wacker Neuson is building Deere-branded excavator models from 1.7 to 7.5 tons. The machines are built at a Wacker Neuson factory in Pinghu, China, and are only being offered in China, Southeast Asia and Oceania, which includes Australia and New Zealand.
The new agreement now encompass the North American market with machines being completed at Wacker Neuson’s plants in Menomonee Falls, Wisconsin, and Linz, Austria.Production for many of the machines related to this new agreement will occur at Wacker Neuson's Menomonee Falls, Wis. plant.Wacker Nelson
Wacker Neuson will now also design and build Deere-branded compact excavator models less than 5 metric tons specifically for the North American market. The machines will be distributed under the John Deere brand via Deere’s network of dealers. Wacker Neuson will continue to distribute its models in the same product range.
“Excavators are an integral part of our customers’ jobsites, and we anticipate growing demand to continue,” said Domenic Ruccolo, senior vice president, sales, marketing and product support, global construction equipment, John Deere. “As we look to the future of our excavator lineup, this agreement will allow us greater flexibility as we continue to deliver a robust product portfolio that prioritizes the operator experience.”
Wacker Neuson management also is confident the agreement will accelerate profits in the medium term. Plans are for a multimillion investment to expand production capacity.
“We are very much looking forward to adding another layer to our growth strategy through this OEM agreement with John Deere for mini and compact excavators,” said Karl Tragl, chairman of the executive board and CEO of the Wacker Neuson Group. “Our relationship with John Deere has been a successful collaboration that spans many years in both the agricultural and construction sectors. Our product and manufacturing excellence complements John Deere’s established market reach in North America to open outstanding business opportunities in the attractive mini and compact excavator market segment.”
The agreement also covers a technical collaboration between the two construction equipment manufacturers in relation to 5- to 9-metric-ton excavators. John Deere will purchase and incorporate design and technical IP provided by Wacker Neuson to adapt and evolve to its own manufacturing and innovation requirements. These models will be exclusive to John Deere, while Wacker Neuson will independently continue to develop, produce and distribute its own 5- to 9-metric-ton excavators under its own brand.
“We’re excited about the expanded agreement as it supports our goal of bringing productivity-driven features and industry leading technology to customers with greater agility,” said Jerred Pauwels, vice president, excavators, strategy and business development, John Deere. “Through this relationship, we’ll innovate faster and offer additional features and performance differentiation for our customers.”
Gert Reichetseder, president and CEO North America at Wacker Neuson, said this will help expand Wacker Neuson's portfolio for the North American market.
“The cooperation with John Deere opens additional sales channels for our high-quality mini and compact excavators,” Reichetseder said.