This year’s show at the Las Vegas Convention Center drew an estimated 2,000 exhibitors and while attendance figures were not available as we prepared this report, observers said traffic was very heavy and attendance was expected to surpass the record 139,100 figure set at the last show in 2023.

Power Systems Research (PSR) sent a team of analysts to the show to talk with exhibitors and attendees about the state of the industry and to learn more about new products.

A list of the products that PSR representatives found interesting is available in the CONEXPO-CON/AGG Product Showcase later in this report.

There were several major exhibitor launches at the show, including John Deere’s introduction of 18 new products, including the 210, 230, and 260 P-Tier excavators. Komatsu: Debuted the HM460-6 (its largest articulated truck) and the D175AX-10 dozer. Liebherr: Displayed the LR 1700-1.0 Crawler Crane, the tallest and heaviest machine at the show with a 700-ton lifting capacity.

More innovative products are described in the CONEXPO Product Showcase below.

IMPRESSIONS

Several key impressions were obvious to members of the Power Systems Research team. This year’s show focused on the profitability of using the new systems of autonomous and connected technology that had been demonstrated in 2023.

One major trend we saw at the show was that equipment driven by hybrid power rather than a total electric solution seemed to be most favored. In 2023, there were a greater number of OEMs showing full electric powered prototypes; this year, while there were electric machines present, the focus seemed to be more on hybrid solutions utilizing a combination of IC engine and battery electric powertrain.

Our PSR team also came away with these observations:

• Smart Machines proactively offer problem solutions and fuel-saving steps; they don’t just identify and signal problems, they begin addressing them immediately.
• Alternative Power has become a reality in equipment power. Equipment at the show demonstrated battery power, hydrogen power, and diesel power.
• Using AI to increase safety and productivity is an important and developing management tool.
• Connected Technology where equipment fleets can be monitored from a central location to optimization equipment utilization, evaluate operator productivity and proactively monitor for any potential issues and help prevent downtime.
• Smarter Equipment. Beyond the machines themselves, many equipment manufacturers are investing heavily in software, telematics and connected platforms designed to give contractors deeper insight into equipment performance and maintenance. In other words, OEMs are increasingly positioning themselves as technology providers, not just equipment manufacturers.
• Artificial intelligence and operator-assist technology were especially prominent across the show floor. Companies including Bobcat Company, Hitachi Construction Machinery and John Deere highlighted new in-cab systems designed to support operators and improve jobsite productivity. Bobcat demonstrated its voice-activated Jobsite Companion, Hitachi showcased its Assist Program, and John Deere Wirthgen Group detailed its SmartDetect and SmartDetect Assist technologies. Designed to help operators stay focused, improve awareness and streamline tasks, these technologies reflect a growing emphasis on smarter machines that work alongside the operator.
• Operator Comfort Is a Growing Priority. As equipment becomes more advanced, manufacturers are also putting renewed focus on the operator experience inside the cab. The thinking is simple: a more comfortable operator is often a more productive operator. As jobsites push for greater efficiency, cab comfort is becoming more than a luxury—it’s a productivity tool.
• Across the show floor, companies highlighted upgrades designed to make long days on the jobsite more comfortable. From ergonomic seat designs to improved joystick placement and better visibility, cab design is becoming a central part of equipment development.
• CASE Construction Equipment, John Deere and DEVELON showcased joystick and control improvements, while Bobcat Company highlighted its new Pro line featuring heated air-ride seats.
• Autonomous Machines Target the Labor Shortage. Artificial intelligence appeared throughout the show, but autonomous and semi-autonomous equipment drew some of the biggest crowds.

Automation has become a major focus for equipment manufacturers as they look for ways to improve safety, productivity and precision on the jobsite. At the John Deere and Wirtgen Group booth, attendees gathered around the company’s 460 autonomous dump truck, one of the newest additions to its growing lineup of automated machines.

One driver behind this push is the industry’s ongoing labor shortage. A big chunk, nearly 40%, of the current workforce is approaching retirement age while fewer young workers are entering the trades.

Autonomous equipment isn’t expected to replace operators entirely, but it can help contractors complete tasks more efficiently with smaller crews. In some cases, technology may also appeal to younger workers who are more comfortable interacting with advanced digital systems and remote controls.

CONEXPO-CON/AGG 2026 PRODUCT SHOWCASE

More than 2,000 exhibitors showed off new products and services at CONEXPO-CON/AGG during the five-day show. The following is a listing of interesting products we saw, organized by equipment type, and listed in alphabetical order by manufacturer. Note that this list is not comprehensive, but we have selected some of the areas we thought would be of most interest to you.  We did not attempt to rate the products; our goal simply was to present to you some of most interesting products we saw.

AUTONOMOUS & ROBOTIC SYSTEMS

Bobcat Companion App. A central orchestration hub allowing a single site manager to supervise up to four autonomous skid steers simultaneously from a tablet. This “force multiplier” technology addresses the operator shortage by moving one worker from a seat to a supervisory screen.

Bomag Remote Roller. Enables high-precision soil compaction via a remote-control interface, removing the operator from high-vibration, high-dust environments into a localized, climate-controlled command center.

Caterpillar CS12 Self-Drive. A fully autonomous soil compactor utilizing satellite-independent path-finding to achieve 2cm pass accuracy without a cab operator. It uses LiDAR to navigate “GPS-denied” environments like deep canyons or urban alleys.

Hitachi AHS Rigid Dump. An advanced autonomous hauling system designed specifically for deep-pit mining and large-scale earthmoving. Its proprietary “Path-Finding AI” allows for fluid navigation around temporary jobsite obstacles without human intervention.

Komatsu Smart Quarry 2.0. A system-wide AI logic that dynamically reroutes autonomous haul trucks based on real-time crusher load and queue times. It optimizes the entire jobsite cycle rather than just individual machine performance.

EARTHMOVING & HEAVY EQUIPMENT

Case 580EV Production. The industry’s first mass-market electric backhoe, delivering a full 8-hour shift of performance with zero on-site emissions. This is the “Gold Standard” for contractors bidding on municipal and indoor utility contracts.

Case TV450B Heritage. A high-performance compact track loader featuring the highest torque-to-weight ratio in its class. Designed for aggressive grading and heavy lifting, it bridges the gap between compact agility and heavy-duty power.

Caterpillar Cat AI Assistant. A voice-activated “agentic” interface that allows operators to request real-time diagnostics and fuel-efficiency coaching mid-cycle. It acts as an in-cab mentor for less experienced operators.

Develon DX22-H Engine. A breakthrough multi-fuel engine designed for heavy excavators, capable of running entirely on direct hydrogen combustion. This allows firms to decarbonize heavy-duty operations without relying on battery weight.

Dynapac Seismic 2.0. An intelligent drum system that automatically detects soil density and adjusts vibration frequency in real-time. This prevents over-compaction, reduces fuel burn, and eliminates “drum bounce” damage.

Hyundai HX230 Next Gen. Features “See-Through Bucket” technology, using augmented reality and external cameras to project a transparent view of the dig site on the in-cab monitor. Dramatically increases safety and precision.

LIFTING & COMPACT EQUIPMENT

Bobcat introduced a new machine. The RX3 (Rogue), next generation, all-electric, and autonomous concept loader.

Scag 2500X . The new tracked dump buggy from Scag is designed for material handling, featuring high maneuverability and low ground compaction while hauling up to 2,500 pounds. The versatile hydra-drive dump buggy is powered by a Vanguard 23 hp commercial grade engine and offers front-pivot and swivel-pivot functionality for precise dumping on the jobsite. 

SENSORS, SOFTWARE, & IOT

Caterpillar VisionLink 2.0. A unified data ecosystem that utilizes open APIs to aggregate telematics from multiple competing OEMs into a single executive dashboard. It eliminates the need for toggling between different manufacturer portals

Flexco FXC Belt Repair. A rapid-response mechanical fastening system that allows operators to bridge conveyor belt tears and resume production in under 20 minutes. A critical tool for aggregate and quarry operations where downtime equals lost revenue.

Gefran TWIIST Sensor. A multivariable linear position sensor providing micron-level feedback for the high-precision automated hydraulic cylinders used in 3D grading. It is the “brain” behind the accuracy of the newest graders.

Hitachi Landros AI. A predictive maintenance platform that uses machine learning to forecast hydraulic component failures up to 50 operating hours before they occur, allowing for scheduled repairs rather than emergency shutdowns.

Ifm 3D Guard Cam. A specialized safety camera that uses AI to distinguish between inanimate jobsite obstacles (cones, barriers) and human workers, triggering automatic braking only when a person is detected.

Moasure 2 PRO. A motion-based measuring tool that allows users to map complex 3D jobsite volumes and perimeters simply by walking the terrain. Data is instantly exported to CAD software for rapid bidding.

Samsara Asset Tag G3. A low-profile, energy-harvesting GPS tag that provides real-time location tracking for non-powered assets like buckets, attachments, and trailers. It requires zero battery changes over its lifecycle.

TRAINING & SIMULATION

Iti VR-X Sim 5. A high-fidelity virtual reality simulator featuring haptic feedback that mimics the physical resistance of different soil types. It allows for safe, low-cost “seat time” before a trainee ever touches a live machine.

ENGINES

Hyundai. H2ICE. Hydrogen engine. In-line 6-cylinder, 11.1L displacement, Euro 6 (Zero-CO2), EPA Tier 4 Final, EU Stage V.    PSR

SUMMARY: Our PowerTracker^TM survey of dealers and distributors reported that overall gen-set sales increased in Q3 2021 up 4.3% from Q2 2021 levels.  This builds on a sales increase of 6.8% in Q2 2021 and a slower start to the year of -7.4% in Q1 2021 as sales were constrained by availability and supply issues. 

This quarter’s results were based on interviews with 110 gen-set dealer and distributor respondents based in North America. The overarching theme in the third quarter was a continuation of sales growth being constrained by the availability and supply of gen-sets.  Longer lead times for dealers to receive shipments is limiting their sales – even though demand from end users remains at high levels. 

The data comes from the proprietary PowerTracker^TM series of syndicated surveys conducted each quarter by Power Systems Research. Each quarter we interview gen-set dealers and distributors and other businesses across North America to maintain a pulse on the sales channels as well as monitor the ongoing needs and plans for businesses to purchase standby gen-sets to support their business operations.

Within gaseous fueled gen-set ranges, the <10 kW range had an increase of 1.3% after two consecutive quarters of decreases: -9.6% in Q1 2021 and -6.2% in Q2 2021.  The 10-20 kW range experienced a more positive sales history over 2021 with 7.8% increase in Q3 2021 and a 7.6% increase in Q2 2021 after a slow start to the year with a 3.6% decrease in Q1 2021.  Rounding out the <50 kW power range, the 21-50 kW range for gaseous fuels increased 7.4% in Q3 2021 after large Q2 2021 quarterly increase of 16.5%.  Other power ranges within gaseous fueled gen-sets from 50-500 kW experienced quarterly increases ranging from 2.9% to 5.7% in contrast to Q2 2021 where quarterly sales were up 8.9% on average.  Finally, the 501-1000 kW range for gaseous fuels was flat in Q3 2021 – following an up and down year where sales were up 9.6% in Q1 2021 and down 2.8% in Q2 2021.

Sales of diesel fueled gen-sets generally leveled off in Q3 2021 relative to the stronger rebound observed in Q2 2021.  The only exception is diesel gen-sets <10 kW which have struggled over the last year with a reported decrease of 10.5% in Q3 2021 and marking five consecutive quarters of sales decreases going back to Q3 2020.  Quarterly change across diesel <300 kW ranged from -12% to 9.6% while the 300-1000 kW range showed increases ranging from 6.3% to 9%.  Finally, the upper power ranges from 1000-5000 kW diesel reported a 5% quarterly increase.

Looking by application, portables were down 2.4% from Q2 2021 levels reflecting a shortage and backlog of available units in the smaller gasoline units. Other applications were up in Q3 2021 including standby (10% increase), Peak Shaving (7% increase), Base Load (6% increase) and Cogeneration (18% increase).  These increases for the “other” applications align with increases we have observed for quarterly sales of gaseous (i.e. natural gas) type of gen-sets >50 kW.

In Q3 2021, dealers reported overall that inventories declined by 6.8% from Q2 2020 levels.  The quarterly decline in inventories for Q3 2021 continues a trend where overall dealer inventories have decreased on a quarterly basis going back to Q2 2020. As demand remains at relatively high levels a high percentage of dealers reported they cannot maintain supply to meet customer demands.  Year-on-Year, inventories are down 41% in Q3 2021 which reflects that inability for dealers to replenish inventory during this time of higher demand and short supply/longer lead times.  Over the last three quarters the overall inventory levels have maintained a level of approximately 40% lower than one year earlier.  Again, this seems to be due to dealers not being able to replenish needed inventories and not the case that dealers are hesitant towards placing orders for new inventory.

METHODOLOGY: Since 1998, Power Systems Research (PSR) has been continuously maintaining its PowerTracker^TM series of syndicated surveys, conducting at least 300 interviews each quarter among two key respondent groups in North America: gen-set dealers and distributors, and business consumers.

We conduct 200 interviews each quarter among dealers and distributors; the focus of this survey is on recent sales and market observations for the current quarter as well as expectations for the coming quarter.

Our Business Consumer survey consists of 100 interviews per quarter among a wide cross section of businesses to gather their input concerning ownership, usage trends and motivating factors for purchase, including any concerns about the reliability and availability of electric power.

Dealer/Distributor Outlook for Q4 2021

Expectations of quarter-to-quarter sales growth for Q4 2021 varied depending on the power range and fuel type.  Sales expectations for diesel fueled gen-sets less than 300 kW were mostly negative with the dealers selling <10kW units citing the largest decrease of 23% and the 101-300 kW range a slight decrease of 1.4%.  The only brighter spot for diesel <300 kW is the 21-50 kW range estimating a 3% increase in Q4 2021 sales.  Sales for diesel fueled sets above 300 kW are more positive with Q4 2021 sales expectations averaging 2.1% for the larger power diesel gen-sets.

Sales expectations for gaseous fueled gen-sets were fairly neutral across the power ranges with quarterly changes ranging from -3% to 3% expected for Q4 2021 sales.  The only exception is the gaseous <10 kW sets which are expecting a decrease of -8.6% for Q4 2021 sales.  This most likely is due to the dealer group’s belief that supply chain issues will continue to hamper sales for smaller gasoline gen-sets through the end of the 2021 year. 

When asked, “Why do you expect sales to change in the upcoming quarter?” comments from dealers focused on the following market observations:

• Longer lead times for gen-set delivery to dealers: Like the past several quarters, 25% of dealers interviewed during Q3 2021 cited long lead times and lack of inventory as a reason their sales would be affected in the upcoming quarter.  The supply chain issues plaguing the industry have translated into lack of available product and is impacting their sales pipeline.

• Weather and power outages: Over 31% of dealer responses noted either winter weather or concern for outages as reasons that their sales would increase in the fourth quarter relative to third quarter.  Many dealers noted the possibility of winter weather events like ice storms as the direct attribution for an increase in sales.  Others noted that an ongoing concern with an increased number of power outages over the last year combined with this threat of winter weather should translate into more inquiries and increased sales.

• Lower Sales Due to Seasonal Reasons: A trend working in the opposite direction as the weather and power outage concerns is just the cyclicality that some dealers experience during the fourth quarter.  About 10% of dealer responses noted they expect decreases in sales due to seasonal reasons.  This is primarily due to the non-residential customer groups where activity in the construction sector slows down during the winter months and the fact that end of year budgets have already been reflected into their third quarter sales estimates.

When asked, “What changes have you recently noticed among particular customer groups or product categories within your market?” there were several comments that emerged as common themes.  Many of these are comments that have carried from quarter to quarter but the following is a sampling of some key observations:

• When asked what changes that dealers have observed among their customers nearly 40% mentioned “Nothing” but quickly followed this up with a comment surrounding “Nothing except for the fact that I can’t get product in at the moment”.  While dealers overall may not be observing any larger trends in their customers groups, the lack of availability of product is right there on the top of their minds.  We can attest to the overall level of frustration being experienced due to lack of available product within the dealer group.  We do feel that dealers are really searching for that day when supply chain issues will get worked out enough and they will have more answers for customers across the board in terms of delivery timeframes that will keep the customer engaged and willing to make a purchase with an acceptable lead time for the desired gen-set.  At the current moment dealers are, in many cases, not able to meet the customer expectations in terms of lead times and this is pushing off those incremental sales.
• As reported in previous quarters there is still a significant level demand from residential for standby generators due to COVID-19, more working from home and general security of energy supply concerns. PSR

Joe Zirnhelt is President and CEO of Power Systems Research.

Joe Zirnhelt President and Chief Executive Officer

×

Joe Zirnhelt is President and Chief Executive Officer of Power Systems Research and a member of the company’s Board of Directors. His responsibilities include management and oversight of the company’s operations as well as leading the implementation of strategic initiatives. Joe joined the company as a Senior Consultant in 2005. After several years working in various management roles within product and project oversight, he served as the company’s Chief Operating Officer & Strategist from 2015 until assuming responsibilities as President and Chief Executive Officer in 2019. Over his 24-year professional career he has served as an Officer in the U.S. Navy including training in the Naval Nuclear Propulsion Program followed by experience with Alstom Power, a leading French power plant developer, before joining Power Systems Research in 2005. Joe holds an undergraduate degree in Mechanical Engineering from the University of Notre Dame and an MBA from the University of Texas at Austin. He has been a regular contributor to Diesel Progress magazine and other industry publications often featuring the North American power generation market. He also is actively involved in the Electrical Generating Systems Association (EGSA) where he has contributed content for its Powerline magazine and recently completed his term as Chair of the Market Trends Committee.

Joe Zirnhelt is president and CEO of Power Systems Research, a company that provides global data and intelligence on engines and power equipment. In this podcast, Joe describes components modules and how clients use this information to enhance the power and utility of the base data. Key components include Spark Plugs, Filters, Turbos, and Axles that are added to the engines and equipment tracked by Power Systems Research.

Transcript

Welcome to the PSR PowerTALK podcast, produced by Power Systems Research.

00:06 Joe Delmont:

From Power Systems Research I’m Joe Delmont, editor of PSR PowerTALK. Today, we’re talking with Joe Zirnhelt about PSR’s database offerings and how clients use them to grow their markets.

Last time, Joe discussed the main features of PSR databases. Today we’ll talk about several component modules offered by the company. These modules increase the power of the base data offered by PSR. Joe is President and CEO of Power Systems Research.

Joe let’s review some of the information about PSR you provided last time. You say PSR is a research company. What kind of research does PSR perform?

00:55 Joe Zirnhelt:

Well thanks, Joe.

Since 1976 we’ve been collecting worldwide production information on engines as well as the OEM’s that install those engines into their powered equipment.

01:11 Joe Delmont:

Production data — what does that involve? What kind of information can a client purchase from PSR?

01:19 Joe Zirnhelt:

Well, our production data includes attributes such as the engine type and size, for example, and the applications that use those engines. We also show details about the equipment models where those engines are installed, as well as information about the OEM’s that are actually producing the equipment.

01:43 Joe Delmont:

Can you be more specific? Can you give us an example?

01:46 Joe Zirnhelt:

Well, it’s pretty simple, really. Take, for example, we’ll list a 300-horsepower engine that’s used in a tractor that’s produced by any one of a number of OEM’s located in the United States. We can tell you what the production is for that tractor with that engine installed.

02:13 Joe Delmont:

OK Joe, using that example, tell us how your database information is organized.

02:21 Joe Zirnhelt:

Actually, we have four very targeted databases: EnginLink, OE Link, CV link, and PartsLink. We cover information globally that includes production, sales, and in-service population of the equipment.

02:44 Joe Delmont:

Joe, for those clients who need information on specific components. Now, how do you meet their needs?

02:52 Joe Zirnhelt:

For those types of clients, we can provide specific component details such as turbocharger supplier, turbocharger geometry, turbo layout and the quantity of turbos per engine installation. These types of details for the turbo, for example, are important for component suppliers who need information about the components that are attached to either the engines or the equipment.

03:25 Joe Delmont:

So what can you tell us about the component modules that Power Systems Research offers? How do they differ from your extracts and how are they different from what other research firms offer?

03:41 Joe Zirnhelt:

Good questions, Joe. “Data is just data” some would say. “It’s just a commodity” — And that is true to a certain extent. But not everyone has the same data or the same level of comprehensiveness, backed up by a team of global analysts, as well as a consistent and systematic process for both researching and validating the data and then putting those items together for the total picture.

04:16 Joe Delmont:

OK, so let’s talk about component modules. What is a component module?

04:21 Joe Zirnhelt:

What we refer to as a component module includes both consumables and major parts that can be related. The key is that they’re related to either an engine or a piece of equipment. And we believe Power Systems Research offers really the widest selection of the most detailed types of component modules in the industry.

04:48 Joe Delmont:

That’s a pretty broad claim, Joe. Why do you say that?

04:52 Joe Zirnhelt:

Well, for this reason: if you look at the PSR component modules available in the component module directory on our powersys.com website, you’ll see a wide range of components that are available. For example, when I mentioned consumables, we have things like spark plugs and filter information. On the more fixed attributes of components we have information about the engine or vehicle, such as the transmission or the axle configuration of a medium or heavy commercial vehicle, or the type of turbocharger or fuel injection equipment that’s used on an engine that is installed into that equipment. So the offerings there on the types of components are very broad.

05:51 Joe Delmont:

I’m still unclear on exactly how you’re defining a component. Can you explain that to me?

05:59 Joe Zirnhelt:

Sure, Joe. We define a component really as anything that can be related or is attached or connected to an engine or a piece of equipment. Things like spark plugs, and filters, I mentioned before, turbos, transmissions. Additionally, a component can be, uh, more of a descriptive attribute about the equipment, such as detailing the possible axle configurations for an equipment model, vehicle model, or the engine oil specifications, or the engine oil change intervals. We can relate those engine oil specs or change intervals to a certain equipment model.

06:50 Joe Delmont:

Got it.

Did these component modules contain current and forecasted component production data?

06:59 Joe Zirnhelt:

Joe, this is really where the powerful aspect of our component information comes into focus.

So let’s take spark plugs for example. Considering the first fit types of installations, the number of spark plugs consumed on an annual basis depends on how many engines are produced and then installed into various types of equipment. Alternatively, for those interested in the aftermarket, we have the in-service population of equipment that’s out there operating. Furthermore, we know what engines are installed into those types of equipment. Thus, we know the demand for spark plugs in the aftermarket will be relatable to that in service population. So, in essence here, the demand for any component we cover is quantifiable when it’s related back to the type of equipment that actually uses that component.

08:08 Joe Delmont:

Well, that’s pretty impressive.

Now, how often do you update your data?

08:13 Joe Zirnhelt:

We’re continually updating our information and we publish a major update report for our subscribers each quarter.

08:22 Joe Delmont:

Well, OK Joe, I’m sure you could dive into more detail about these components packages, but we’re running out of time today. We can discuss more about specific component modules and the available fields associated with each one in future podcasts. In the meantime, please tell our listeners how they can learn more about the component modules you offer.

08:48 Joe Zirnhelt:

Joe, listeners can go to our website at powersys.com and download the component modules directory. That’s available from the Component Module section under the Products dropdown menu on our website. This directory has the full list of information on all of the components we track.

09:12 Joe Delmont:

Joe, thanks for joining us today and updating us on the component modules offered by PSR.

Look for industry reports every month in the PSR PowerTALK news report and on this podcast. Contact us for more information at (651) 905-8400 or email us at info@powersys.com.

Thank you for joining us today and please visit the PowerTALK archive for other episodes of the show at powersys.com.

09:50

Thank you for joining the PSR PowerTALK podcast. This podcast will be available on demand. Search for “PSR PowerTALK” in your podcast app or Google “Power Systems Research” to sign up today.

Joe Zirnhelt President and Chief Executive Officer

×

Joe Zirnhelt is President and Chief Executive Officer of Power Systems Research and a member of the company’s Board of Directors. His responsibilities include management and oversight of the company’s operations as well as leading the implementation of strategic initiatives. Joe joined the company as a Senior Consultant in 2005. After several years working in various management roles within product and project oversight, he served as the company’s Chief Operating Officer & Strategist from 2015 until assuming responsibilities as President and Chief Executive Officer in 2019. Over his 24-year professional career he has served as an Officer in the U.S. Navy including training in the Naval Nuclear Propulsion Program followed by experience with Alstom Power, a leading French power plant developer, before joining Power Systems Research in 2005. Joe holds an undergraduate degree in Mechanical Engineering from the University of Notre Dame and an MBA from the University of Texas at Austin. He has been a regular contributor to Diesel Progress magazine and other industry publications often featuring the North American power generation market. He also is actively involved in the Electrical Generating Systems Association (EGSA) where he has contributed content for its Powerline magazine and recently completed his term as Chair of the Market Trends Committee.

Joe Zirnhelt is president and CEO of Power Systems Research. Today, Joe will describe the landscape of databases available from Power Systems Research and how clients typically access and use the databases. Next week, in Part 2 of this discussion, he’ll explain how component modules are assembled to detail important attributes about the engines and equipment such as Turbos, Transmissions and Axles.

Transcript

Welcome to the PSR PowerTALK podcast, produced by Power Systems Research.

00:06 Joe Delmont:

From Power Systems Research I’m Joe Delmont, editor of PSR PowerTALK. Today, we’re talking with Joe Zirnhelt about PSR’s database offerings and how their clients use them to grow their markets. In the next episode, we’ll talk about some examples of component modules; which increase the power of their databases.

Joe is President and CEO of Power Systems Research.

Joe, let’s start at the beginning. You say PSR is a research company. What kind of research do you do?

00:41 Joe Zirnhelt:

Thanks Joe. Since 1976, we’ve been collecting worldwide production information on engines as well as the OEMs that install those engines into their various types of powered equipment.

01:00 Joe Delmont:

So, what kind of data do you collect?

01:04 Joe Zirnhelt:

Well, the main information we collect and offer is production information. In other words, how many units are produced. And, by showing some attributes about what is powering in that equipment, like the engine type and size, as well as the applications that use those engines, and where the equipment is manufactured, we enable our clients to really analyze and segment their markets that are of most interest to them.

01:40 Joe Delmont:

Well, that sounds complicated. Can you give us some examples?

01:45 Joe Zirnhelt:

Sure, it’s really pretty simple. An example here, take a 300 horsepower engine model, suitable for use in tractors produced in North America — we can tell the user what tractor models are using that 300 horsepower engine model, and where those tractors are being manufactured, as well as the number of units produced each year.

02:16 Joe Delmont:

So Joe, I’m using that example. Can you tell us how your database information is organized and how a client could access this data?

02:29 Joe Zirnhelt:

Actually, we have several targeted databases.

We cover information globally, including the production, sales, and in-service population of the equipment, and then we break that out into 12 world regions and 13 different industry segments. We include anything from the smallest equipment in the lawn and garden segment to the largest types of equipment such as rigid-haul mining trucks in the construction segment.

03:06 Joe Delmont:

Joe, if you place all those data points in one huge database, how do your clients find the information they need? The database would be massive.

03:18 Joe Zirnhelt:

Well, actually Joe, we have four separate databases, with each one being highly focused on engine data, OEM production, commercial vehicles, and one additional database, PartsLink, which features in-service population data for powered vehicles and equipment.

03:43 Joe Delmont:

Can you briefly describe each of these databases?

03:50 Joe Zirnhelt:

Sure. We have four proprietary databases Enginlink, OE Link, CV Link, and PartsLink. EnginLink provides specification data for internal combustion engines as well as engine production and forecast information. OE Link is our database of powered equipment; including production and forecast data for the OEMs that assemble the powered equipment. CV Link provides production, forecast, and specification data for on-highway commercial vehicles class 4 through 8. And finally, PartsLink provides the in-service population data for the vehicles and equipment that are in operation around the world.

04:51 Joe Delmont:

I get the idea. Four specially-focused databases. Now, how do clients know which one to use and how do they find the data they need?

05:03 Joe Zirnhelt:

It it’s easy for clients to access our data. We offer two basic formats. Our clients pick the one that works best for them.

05:14 Joe Delmont:

OK, keep going. Tell us about it.

05:17 Joe Zirnhelt:

So the first is what we call a database license subscription. This is a one-year subscription which allows a client to access our online dashboard where he or she can create and run reports. Clients can also export those results for use in their own external analysis tools.

05:40 Joe Delmont:

Plenty of data; but I would guess that this data gets outdated very quickly. How often is the information updated during a 12-month subscription?

05:52 Joe Zirnhelt:

Well Joe, that it’s a very good point and a question we often receive from new perspective user companies. We know that the segments that we cover are constantly changing and evolving, so over the course of a year-long subscription, clients receive quarterly database updates; where we provide the latest data releases and forecast results. And then, additionally, as a supplement to the, the data, we provide our licensed clients with quarterly update bulletins. And these quarterly update bulletins contain an overview of the information that’s been updated over the last quarter; plus our five-year forecast and the insights behind the forecast drivers and trends by region and segment.

06:52 Joe Delmont:

Well Joe, that sounds like a potentially broad scope. How do you work with clients to narrow in on what they really need?

07:03 Joe Zirnhelt:

Well, our databases are, are set up to allow subscribers to have access to the data that’s of most interest to them. A data scope will often be defined by several parameters, such as fuel types, the OEM drive types — such as internal combustion, electric, hybrid, fuel cell — the power ranges involved, the regions and segments involved, among other possible attributes about the engines or equipment.

07:41 Joe Delmont:

OK, uhm that’s a lot of information. Can you give us an example of a data scope?

07:50 Joe Zirnhelt:

Sure, a client, for example, can drill down through our data to produce a report that tells him or her the number of tractors of more than 300 horsepower that will be produced in North America each year over the time period of 2016 to 2026.

08:16 Joe Delmont:

The annual subscription sounds like something a power user would need. Do you have anything for a smaller user?

08:25 Joe Zirnhelt:

We certainly do. A more simplified way to access our data is through a one-time data extract that we provide in Excel format.

08:36 Joe Delmont:

OK, that’s impressive. It certainly sounds like your clients can tailor the information packages to meet their exact needs, but I assume this flexibility can be very costly.

08:50 Joe Zirnhelt:

Well, the costs involved really depend on many aspects surrounding the scope and breadth of data involved. A basic one-time extract can be purchased for as little as $2500; and, I’d say our average first time extract purchase is about $7500.

09:15 Joe Delmont:

How do you charge for annual subscriptions?

09:19 Joe Zirnhelt:

Well, an annual subscription that covers several segments in more than one region is going to be more expensive than a simple data extract. However, it does provide more information. Starting with a higher level view and, the most, in the area of most interest, allows a client to really work with the data over a period of time and develop a feel for the value that they derive from the data and really align their budget and needs over time.

Our database products are priced according to the number of unique data records that a client has access to; which is ultimately determined by the data scope that we talked about earlier. This is the type of flexibility that we will aim to achieve in the scoping process to allow our clients to buy as much or as little data as they need. This really allows them to analyze the markets they’re most interested in without paying for unnecessary regions or segments that they don’t really need.

10:39 Joe Delmont:

Joe, thanks for joining us today and updating us on PSR’s database offerings. Next week, we’ll discuss PSR’s unique offerings of component modules for items such as transmissions, axles, and turbos.

Look for industry reports every month in the PSR PowerTALK news report and on this podcast. Contact us for more information at (651) 905-8400 or email us at info@powersys.com.

Thank you for joining us today and we look forward to meeting again to dive a little deeper on what types of fields are available within the different types of component modules.

In the meantime, visit the PSR PowerTALK archive for other episodes of this show at powersys.com.

11:37

Thank you for joining the PSR PowerTALK podcast. This podcast will be available on demand. Search for “PSR PowerTALK” in your podcast app or Google “Power Systems Research” to sign up today.

The Q1 2021 PSR PowerTracker survey provides information on North American gen-set sales trends. Joe Zirnhelt, Power Systems Research President and CEO, provides the analysis.

Transcript

Welcome to the PSR Power Talk podcast, produced by Power Systems Research.

From Power Systems Research I am Joe Zirnhelt. And in today’s PowerTALK podcast we will discuss results from the first quarter of 2021 based on our ongoing PowerTracker survey.

00:17

First, a brief background and our PowerTracker survey. Since 1998, Power Systems Research has been continuously maintaining this PowerTracker series of syndicated surveys, conducting at least 300 interviews each quarter among two key respondent groups in North America; 200 interviews with genset dealers and distributors, and at least 100 interviews with business consumers.

Information from our PowerTracker is really targeted at describing what is happening in the sales channel for gensets within North America and maintaining a quarterly pulse on many aspects; from sales by brand, fuel, and power range, as well as trends and inventory levels, the outlook for the coming quarter, as well as open-ended comments from dealers concerning both why they expect sales to change and what types of changes they’re seeing in their customer groups.

01:28

So today we’ll focus on what dealers had to say about the first quarter of 2021.

A note on the timing of our quarterly survey is that we conduct our dealer interviews in the last two weeks of the quarter and into the first month of the next quarter. This really allows us to gather the dealer inputs concerning the quarter that was just completed.

01:54

So, let’s get started looking at the first quarter report for 2021.

Overall, genset sales declined in the first quarter 2021; down 7, about 7.4% from quarterly sales in the fourth quarter of 2020. This decrease follows three consecutive quarters in 2020, where dealers reported overall sales increases of 4% in the second quarter of 2020, followed by 12% in the third quarter, and finally 6% in the fourth quarter of 2020.

02:40

Looking at sales by fuel type and power range first within gaseous field gensets, which would include gasoline, natural gas, and LPG, the less than 10 kW range had a first quarter decrease of 10%. While the 10 to 20 kW range experienced a decrease of 3%. Rounding out the less than 50 kW units, the 21 to 50 kW range for gaseous fuels was level with the fourth quarter of 2020 levels. Keeping in mind here that the 10 to 20 kW and the 21 to 50 kW ranges experienced growth rates of greater than 10% in each, the third and fourth quarters of 2020, uh, the slightly negative and flat growth in the first quarter of 2021 still represents a fairly strong level of unit sales.

On the larger end of things, for gaseous fuels, and worth noting here, is that the 500 to 1000 kW range for natural gas gensets experienced a 9% growth in the first quarter; rebounding from two consecutive quarters of flat to slightly negative growth.

04:11

Looking at the sales of diesel fuel gensets, these will improve slightly from the sharp declines we saw in the fourth quarter of 2020; but they’re still on the negative growth territory for the first quarter of 2021. Quarterly change across diesel less than 300 kW ranged from minus 4% to minus 9%, while the 300 to 1000 kW range was, was flat relative to fourth quarter 2020 levels.

04:47

Now let’s move on to inventories.

In the first quarter of 2021, dealers reported, overall, that inventories declined by 16% from the fourth quarter 2020 levels. This large, quarterly decline in inventories for the first quarter follows a fourth quarter of 2020 where inventories fell by 19%. So, as demand remains at, at high levels, even despite the negative, overall, first quarter sales growth, we’re still seeing a large number of dealers reporting they cannot maintain supply to meet customer demands; and therefore, we’re seeing inventories continued to, to fall.

05:40

So, what does the outlook appear to be for the second quarter of 2021?

Expectations of quarter-to-quarter sales growth for the second quarter of 2021 varied depending on the power range and field type. Sales for diesel fueled sets are expected to continue to improve in the second quarter with growth between 2% to 6% for the power ranges less, above 20 kW. Diesel fueled units less than 20 kW will see greater increases; with 23% projected for the less than 10 kW diesel, and 15% quarterly growth for the 10 to 20 kW diesel range.

This continues our belief from last quarter that dealers seem to feel that the declines in diesel may have bottomed out and we’ll start to see some growth in the coming out of COVID and now into the peak of construction season, especially for the diesel units less than 20 kW.

06:57

Sales expectations for gaseous fueled gensets are expected to see an increase of 9% in the power range is less than 50 kW. We see this as a positive sign that dealers believe that lead times will improve and product will become more readily available. The outlook for gaseous field gensets above 50K W is positive, ranging anywhere from 2 to 6% for the second quarter.

07:33

So finally, here we’ll look at some of the open-ended responses from dealers and some of the takeaways that we’ve noted.

So, so the first, the first topic is around what, what dealers or why do dealers expect sales to change in the coming quarter the, the second quarter of 2021?

And the first point is that the longer, longer lead times persist for genset delivery to dealers. This is similar to what we mentioned in the fourth quarter of 2020.

08:09

That over 30% of the dealers interviewed during the first quarter of 2021 cited longer lead times and lack of inventory is a reason that their sales would be affected in the upcoming quarter. The lack of available product is, is delaying their, their sales pipeline. And this it was most specifically targeted with the smaller end of the range for residential and some small commercial standby sets in the less than 50 kW range.

08:46

Second point here is that the product is starting to become available. And this is in contrast to the first point, that about the long lead times and the lack of product availability, is that there were a small and, I’d say, a minority number of dealers that expressed some optimism surrounding the fact that they did see some relief in sight for the short supply of the smaller rated portables and residential standby. Again, this was a a smaller number of dealers overall, but the last quarter, for example, there were no mentions about this “light at the end of the tunnel” in terms of seeing their backlog improve. So, hopefully that’s a sign of things to come.

09:36

And then, finally, here, dealer, the demand and activity levels are up.

A growing number of dealers commented on either demand or activity levels indicate, indicated a relatively strong market for gensets in their local area. Overall, the general sentiment reflected a total market that has some, certainly some, positive momentum at the current time. And the, the economy, in general, seems to be improving and a stronger business outlook will support continued sales.

10:17

Final topic here is dealer comments about what changes they’ve noticed in their customer groups?

I have two key takeaways for the first quarter here, and this this also follows from the fourth quarter of 2020, is that continued, you know, strong demand from residential customers. Dealers have seen an increase in demand from the residential group for standby generators due to COVID-19 and, and just general security of energy supply concerns.

And the final point here is, you know, changes in customer groups is knowledgeable customers. You know, potential customers are doing their homework before contacting the genset dealers. The customers are often having a good understanding of the many considerations to be evaluated during the purchase process. There is still some education involved between the dealers and the customer, but the, the base knowledge level of the, the customers noticeably, notes, noticeably improving over time; in the eyes of the dealer.

11:40

So, this, this overview has been prepared based on our PowerTracker surveys. Please contact us for more information on either the PowerTracker survey for North America or any other needs you may have for power generation, data, and information. Thank you.

11:44

Thank you for joining the PSR PowerTALK podcast. This podcast will be available on demand. Search for “PSR PowerTALK” in your podcast app or Google “Power Systems Research” to sign up today.

As we move through the 2021 year, we at Power Systems Research are working to include enhancements within the data for our Medium and Heavy Vehicles segment that is available in OE Link, CV Link and PartsLink.

We have added several new fields to increase the value of the data to users as they analyze and further segment the markets.  These enhancements, now available as of March 31, 2021,  include:

OEM Assembly Information for Knockdown (Kit) Production. New fields including OEM Assembly Type (Kit vs. Full),  OEM Assembly Plant and OEM Assembly Country which will help in the analysis of OEMs involved in knockdown production (i.e. Kit) where initial production of the engine and chassis are different from the final OEM Country.

Truck Configuration and Engine Location. OEM Configuration denotes the engine location, either Cab-Over-Engine (COE) or Conventional as well as OEM Engine Location as either Front or Rear.

OEM Platform. The OEM Platform field for Medium and Heavy Vehicle ties together groupings of current generation vehicles and their future replacement(s) based upon the commonality of their components and systems.  The addition of the OEM Platform field allows for a more streamlined analysis for individual models within a given platform.

GVWR and GCWR Ratings. Another item in progress is to provide the GVWR and GCWR ratings for the models within Medium and Heavy Vehicles segment which help users further analyze this important segment.  We plan to have this available in our next quarterly update at the end of June 2021. PSR

Joe Zirnhelt is President and CEO of Power Systems Research

SUMMARY: Our PowerTracker^TM dealer and distributor survey of 200 respondents reported that overall gen-set sales declined in Q1 2021 down 7.4% from Q4 2020 levels.  This decrease follows three consecutive quarters in 2020 where dealers reported overall sales increases of 4.5% in Q2 2020 followed by 11.9% in Q3 2020 and 6.3% in Q4 2020.

Although sales were down 7.4% in the first quarter, the results were unique in that there was a different story depending on the fuel and power range being considered.

The data comes from the proprietary PowerTracker^TM series of syndicated surveys conducted each quarter by Power Systems Research. A total of 300 interviews are completed each quarter with gen-set dealers and distributors and businesses across North America.

Within gaseous fueled gen-set ranges, the <10 kW range had a first quarter decrease of 9.6% while the 10-20 kW range experienced a decrease of 3.6%.  Rounding out the <50 kW power range the 21-50 kW range for gaseous fuels was level with Q4 2020 levels.  Keeping in mind that the 10-20 kW range and 21-50 kW ranges had experienced quarterly growth of greater than 10% in each Q3 2020 and Q4 2020 the slightly negative and flat growth in Q1 2021 still represents a strong sales level.  Other power ranges within gaseous fueled gen-sets from 50-500 kW experienced quarterly increases ranging from 1.9% to 2.6% in contrast to Q4 2020 where quarterly sales were down 3% on average.  Finally, the 501-1000 kW range experienced 9.6% growth in Q1 2021 – rebounding from two consecutive quarters of flat to slightly negative growth.

Sales of diesel fueled gen-sets improved slightly from the sharp declines of Q4 2020 but were still in negative growth territory for Q1 2021.  Quarterly change across diesel <300 kW ranged from -4% to -9% while the 300-1000 kW range was flat.  Finally, in the upper power ranges things were more positive with 1000-2000 kW reporting a 33% quarterly increase after four quarters of negative to slightly positive growth.  The highest reported range of 2001-5000 kW reported an 8.3% increase after a similar scenario as the 1000-2000 kW range consisting of four previous quarters of negative to slightly positive growth.

Looking by application, portables were down 11% from Q4 2020 levels reflecting a shortage and backlog of available units in the smaller gasoline units. Base Load was up 6.5% from Q4 2021 levels which aligns with the quarterly increases observed in the gaseous (i.e. natural gas) type of gen- sets >500 kW. 

In Q1 2021, dealers reported overall that inventories declined by 16.7% from Q4 2020 levels.  The large quarterly decline in inventories for Q1 2021 follows a Q4 2020 where inventories fell 19.1%.  As demand remains at high levels (despite the negative Q1 2021 sales growth) for residential standby units an overwhelming number of dealers reported they cannot maintain supply to meet customer demands.  Year-on-Year, inventories are down 39% in Q1 2021 which reflects the inability dealers are facing to replenish inventory during this time of high demand and longer lead times.  This is from a Year-on-Year change of -26% in Q3 2020 representing a total 12.9% shift in one quarter when considering Year-on-Year inventory levels in Q1 2021 relative to Q4 2020.  Again, this seems to be due to dealers not being able to replenish needed inventories and not the case that dealers are hesitant towards placing orders for new inventory.

METHODOLOGY: Since 1998, Power Systems Research (PSR) has been continuously maintaining its PowerTracker^TM series of syndicated surveys, conducting at least 300 interviews each quarter among two key respondent groups in North America: gen-set dealers and distributors, and business consumers.

We conduct 200 interviews each quarter among dealers and distributors; the focus of this survey is on recent sales and market observations for the current quarter as well as expectations for the coming quarter.

Our Business Consumer survey consists of 100 interviews per quarter among a wide cross section of businesses to gather their input concerning ownership, usage trends and motivating factors for purchase, including any concerns about the reliability and availability of electric power.

Dealer/Distributor Outlook for Q2 2021

Expectations of quarter-to-quarter sales growth for Q2 2021 varied depending on the power range and fuel type.  Sales for diesel fueled sets are expected to continue to improve in Q2 2021 with growth between 2-6% for power ranges above 20 kW.  Diesel fueled units less than 20 kW will see greater increases with 23% for the <10 kW units and 15.5% for 10-20 kW range.  This continues our belief from last quarter that dealers seem to feel that the declines in diesel may have bottomed out and we will start to see some growth coming out of COVID and now into the peak of construction season.

Sales expectations for gaseous fueled gen-sets are expected to see a quarterly increase of 9% in the power ranges <50 kW.  We see this as a positive sign that dealers believe lead times will improve and product will become more readily available.  The outlook for gaseous fueled units above 50 kW is positive – ranging from 2% to 6% for Q2 2021.

When asked, “Why do you expect sales to change in the upcoming quarter?” comments from dealers focused on these market observations:

• Longer lead times for gen-set delivery to dealers: Similar to Q4 2020 over 30% of dealers interviewed during Q1 2020 cited long lead times and lack of inventory as a reason that their sales would be affected in the upcoming quarter.  The lack of available product is delaying their sales pipeline.  This was most specifically targeted with the smaller end of the range for residential and some small commercial standby sets (<50 kW).

• Product is starting to become available: In contrast to the first point concerning long lead times and lack of product availability, there were a small (minority) number of dealers that expressed some optimism surrounding the fact that they did see some relief in sight for the short supply of smaller rated portables and residential standby.  Again, this was a smaller number of dealers overall but last quarter, for example, there were no mentions about light at the end of the tunnel in terms of seeing their backlog improve.

• Demand and activity levels: A growing number of dealers that commented on either demand or activity levels indicated a relatively strong market for gen-sets in their local area.  Overall, the general sentiment reflected a total market that has some positive momentum at the current time.  The economy in general is improving and a stronger business outlook will support continued sales.

When asked, “What changes have you recently noticed among particular customer groups or product categories within your market?” there were several comments that emerged as common themes.  Many of these are comments that have carried from quarter to quarter, but this is a sample of some key observations:

• Significant increase in demand from residential for standby generators due to COVID-19 and general security of energy supply concerns.
• Potential customers are doing their homework before contacting the gen-set dealers.  Customers quite often have a pretty good understanding of many of the considerations that need to be evaluated during the purchase process.  There is still some education involved between the dealer and the customer, but the base knowledge level of the customer is noticeably improving. PSR

Joe Zirnhelt is President and CEO of Power Systems Research

Transcript

Welcome to the PSR PowerTALK podcast, produced by Power Systems Research.

00:06 Joe Zirnhelt:

From Power Systems Research, I am Joe Zirnhelt. In today’s PowerTALK podcast we will discuss results from the fourth quarter of 2020 based on our ongoing PowerTracker survey.

00:16 Joe Zirnhelt:

First just a brief background on our PowerTracker survey. Since 1998, Power Systems Research has been continuously maintaining its PowerTracker series of syndicated surveys. Conducting at least 500 interviews each quarter among two key respondent groups in North America: first is 200 interviews among genset dealers and distributors, and second is 300 interviews among business consumers.

00:56 Joe Zirnhelt:

Information from PowerTracker is really targeted at describing what is happening in the sales channel for gensets within North America. In maintaining a quarterly pulse on many aspects of sales levels by brand, fuel, and power range, as well as trends in inventory levels, the outlook in the coming quarter for genset sales, as well as any open-ended comments from dealers concerning why they expect sales to change and what types of changes they see in their customer groups.

01:36 Joe Zirnhelt:

So today we’ll focus on what dealers had to say about the fourth quarter of 2020.

And just a note on the timing of our quarterly survey is that we conduct our dealer interviews in the last two weeks of the quarter that we’re reporting on, and then that goes over into the, the first month of that next quarter. But what this really allows us to do is to, to gather dealer inputs towards the end of that quarter and that we have a good snapshot and, uh, view of the quarter that was just completed.

02:16 Joe Zirnhelt:

So let’s start in on the fourth quarter of 2020.

Overall, sales for gensets continued on a positive trend in the fourth quarter of 2020; up 6.3% from the third quarter levels. This increase followed a slow start to the 2020 year where, overall, dealer-reported sales were down 10% in the first quarter, followed by successive increases of 4% in the second quarter, and then 12% in the third quarter.

02:58 Joe Zirnhelt:

Looking by fuel type and power range within gaseous fueled gensets for the first quarter of 2021, the 10 to 20 kW range had a fourth quarter increase of 13%, and the 21 to 50 kW range saw an increase of 19%. Other power ranges above 50 kW within gaseous fueled gensets experienced a quarterly decrease ranging anywhere from -2 to -5%. And that’s in contrast to a third quarter where the, the greater than 50 kW range saw sales increases in the range of 10 to 30%. So quite a leveling off there in the larger gaseous gensets.

03:45 Joe Zirnhelt:

The diesel fueled gensets, on the other hand, experienced a sharp quarterly decline across the power ranges. Ranging from, uh, -17% in the less than 20 kW gensets and then declines a little more moderate, but still declines of -7 to -8% in all the other power ranges. And this follows a third quarter of 2020 where diesel fueled sets generally experienced low single digit increases from the second quarter to the third quarter of 2020.

04:31 Joe Zirnhelt:

Now we’ll look at the inventory levels. In the fourth quarter of 2020, dealers reported that overall inventories declined by 19% from third quarter 2020 levels. This is significant as it represents the largest magnitude of change in quarterly inventories we’ve, we’ve observed since starting our PowerTracker survey back in 1998.

It’s evident that sales most likely would have been higher in the 10 to 50 kW range for gaseous units. It was evident that the dealers couldn’t simply could not obtain products to meet customer demands due to the longer lead times.

05:14 Joe Zirnhelt:

So what does the outlook appear to be for the first quarter of 2021?

05:20 Joe Zirnhelt:

Expectations of quarter to quarter sales growth for the first quarter of 2021 varied depending on the power range and field type.

Sales for diesel fueled sets are expected to be positive in the low single digits for units above 300 kW and slightly negative for units less than 300 kW. We interpret this outlook from dealers to indicate that the declines and diesel may have bottomed out and we’ll start to see some leveling off and slight recovery as dealers start to fulfill commercial and industrial demand that has been withheld over the last year due to the COVID-19 pandemic, as well as just a general uncertainty during the 2020 year.

06:17 Joe Zirnhelt:

Sales expectations for gaseous fueled gensets are expected to range from -3% to -10% in the power ranges less than 50kW. We see this first quarter forecasted decrease not as a decrease in demand per se, but rather a situation where the current supply cannot meet the current demand for these smaller gaseous gensets.

06:53 Joe Zirnhelt:

The outlook for gaseous fueled gensets above 50kW is positive; ranging anywhere from 2% to 4% for the first quarter and most likely reflecting a situation where, where there is demand there. And dealers feel that they’ll be able to, uh, there’ll be suitable product available to meet that current demand

07:10 Joe Zirnhelt:

And finally, here we look at some of the key themes that emerged in the comments from the genset dealers.

07:19 Joe Zirnhelt:

First area that we’ll explore is the, you know, we asked dealers why do you expect sales to change in the coming quarter?

Really, three key themes here that, that emerged, and (the) first one is longer lead times for genset delivery to the dealers. Over 30% of the dealers we interviewed this quarter, uhm, for the fourth quarter of 2020 cited the, the long lead times and lack of inventory as a reason their sales would be impacted in the upcoming quarter. The lack of available product is delaying their sales pipeline, and this was most specifically targeted at the smaller end of the range for the residential and may include some small, smaller commercial standby sets; 50 kW or less.

The second point here is that the waiting is over. Interestingly, in third quarter of 2020 we did not hear as much, as we normally would in an election year, of consumers taking a wait and see approach in the run up to a presidential election. In the fourth quarter of 2020, we did hear, in retrospect, that some dealers are now reporting that their customers are feeling that, since the election is over and the pandemic is, is perhaps not so new any longer, that they’re ready to move forward with quotes and purchases.

The final point here, and why would sales change, is a common one that was see each quarter: and it’s the weather. We reported last quarter the, the weather effects, you know, are, are varied and really depend on, on the region of the country. The, the fourth quarter reporting period is always rather varied because some parts of the country see more activity during the winter months, in the end of the year, whereas other parts of the country see less activity during the winter months, such as hurricane areas where hurricane season has, has passed.

09:35 Joe Zirnhelt:

So finally, will we, we asked dealers what changes they noticed in their customer groups.

The key points here. The first one was that there’s a, definitely a strong, stronger demand from residential consumers. Dealers reported seeing significant increase in demand from the residential for standby generators due to the COVID-19, more people working from home, as well as just general security of energy supply concerns.

The second point is that the age range has widened. For those interested in home standbys, it’s generally been an older demographic that’s been showing the most interest in standbys. But there’s a few comments this quarter that, that really indicated a, uh, widening in that age range of interested customers, including a definite younger end of the, the demographic also.

Then the final point here is that the consumers are willing to spend. This relates back to the shortage of supply. We typically would see several comments from dealers about customers shopping around and, and bargaining on price. In this quarter, there really were no comments relating to price sensitivity. The consensus was, from the dealers, that if the product is available, the customers are willing to spend. And so, so that tide is really shifted over the, the course of 2020, you know, through the pandemic where customers are now there, they’re ready to spend. There’s less uncertainty.

11:16 Joe Zirnhelt:

So that, that wraps up our overview for the fourth quarter of 2020. This overview has been prepared based on our PowerTracker survey series for North America. Please contact us for more information on on our PowerTracker survey for North America or, really, any other needs you may have for power generation data and information.

Thank you.

11:44

Thank you for joining the PSR PowerTALK podcast. This podcast will be available on demand. Search for “PSR PowerTALK” in your podcast app or Google “Power Systems Research” to sign up today.

SUMMARY: Our PowerTracker^TM dealer and distributor survey of 200 respondents reported that overall gen-set sales continued a positive trend in Q4 2020 up 6.3% from Q3 2020 levels.  Sales gains could have been even higher because dealers ran out of inventory. This increase follows a slow start to the year in Q1 2020 where overall dealer reported sales were down 9.8% from Q4 2019 levels followed by successive increases of 4.5% in Q2 2020 and 11.9% in Q3 2020.

Although sales were up 6.3% for the fourth quarter, the results were unique in that there was a different story depending on the fuel and power range being considered.  The quarterly sales increase was anchored by abnormally high increases for gaseous fueled units in the 10-50 kW range and moderate to large decreases in the other power ranges of gaseous fuels as well as diesel fueled sets.

The data comes from the proprietary PowerTracker^TM series of syndicated surveys conducted each quarter by Power Systems Research. A total of 500 interviews are completed each quarter with gen-set dealers and distributors and businesses across North America.

Within gaseous fueled gen-set ranges, the 10-20 kW range had a fourth quarter increase of 13.3% and the 21-50 kW range an increase of 19.8%.  Other power ranges within gaseous fueled gen-sets experienced quarterly decreases ranging from -2% to -5% in contrast to Q3 2020 where quarterly sales increases were in the range of 10% to 30%.  The demand for gaseous units other than 10-50 kW has subsided from Q3 to Q4 whereas there is still a very strong demand for the residential standby gaseous fueled units in the 10-50 kW range.

Diesel fueled gen-sets experienced sharp quarterly declines across the power ranges ranging from -18% to -16% in the <10 kW and 10-20 kW range respectively and then declines of -7% to -8% in all other power ranges.  This follows Q3 2020 where diesel fueled sets generally experienced low single digit increases from Q2 2020 to Q3 2020.

Looking by application, Standbys carried the recovery this quarter with a quarterly increase of 16.4%.  Portables had a quarterly decrease of -2% in Q4 2020 after a Q3 2020 increase of 10%. Demand in all other application categories remained relatively flat including Temporary, Peak Shaving, Baseload, and Cogeneration compared to Q3 2020 levels. This highlights the increase in demand for Standby as consumers have started to spend in 2020. 

This continued trend towards increased spending comes after a slow start to the 2020 year with the onset of the COVID-19 pandemic as well as general uncertainty and security of power supply and weather activity that has created a surge in demand for residential standby units.

In Q4 2020, dealers reported overall that inventories declined by 19.1% from Q3 2020 levels.  This is significant as it represents the largest magnitude of change in quarterly inventories we have observed since starting our PowerTrackerTM survey in 1998. 

The large quarterly decline in inventories for Q4 2020 follows a Q3 2020 where inventories fell 8.3%.  As demand has continued to peak for residential standby units an overwhelming number of dealers reported they cannot maintain supply to meet customer demands. 

Sales would most likely be higher in the 10-50 kW range for gaseous units, but dealers simply cannot obtain products to meet customer demands due to the long lead times.

Year-on-Year, inventories were down 26% in Q4 2020.  This is from a Year-on-Year change of -7.9%% in Q3 2020 representing a total 18.2% shift in one quarter when considering Year-on-Year inventory levels in Q4 2020 relative to Q3 2020.  Again, this seems to be due to dealers not being able to replenish needed inventories and not the case that dealers are hesitant towards placing orders for new inventory.

METHODOLOGY: Since 1998, Power Systems Research (PSR) has been continuously maintaining its PowerTracker^TM series of syndicated surveys, conducting at least 500 interviews each quarter among two key respondent groups in North America: gen-set dealers and distributors, and business consumers.

We conduct 200 interviews each quarter among dealers and distributors; the focus of this survey is on recent sales and market observations for the current quarter as well as expectations for the coming quarter.

Our Business Consumer survey consists of 300 interviews per quarter among a wide cross section of businesses to gather their input concerning ownership, usage trends and motivating factors for purchase, including any concerns about the reliability and availability of electric power.

Dealer/Distributor Outlook for Q1 2021

Expectations of quarter-to-quarter sales growth for Q1 2021 varied, depending on the power range and fuel type.  Sales for diesel fueled sets are expected to be positive in the low single digits for units above 300 kW and slightly negative for units less than 300 kW.

We interpret this outlook from dealers to indicate that the declines in diesel may have bottomed out and we will start to see some leveling off (<300 kW diesel) and slight recovery  (>300 kW diesel) as dealers fulfill commercial and industrial demand that has been withheld due to COVID-19 during 2020 year-to-date.

Sales expectations for gaseous fueled gen-sets are expected to range from -3% to -10% in the power ranges <50 kW.  We see this as not a decrease in demand but rather a situation where current supply cannot meet current demand. 

Lack of inventories and long lead times will defer sales of these units to future quarters when product is available.  The outlook for gaseous fueled units above 50 kW is positive – ranging from 2% to 4% for Q1 2021 most likely reflecting a situation where there is demand and dealers feel that there will be suitable product available to meet current demand.

When asked, “Why do you expect sales to change in the upcoming quarter?” comments from dealers focused on these market observations:

• Longer lead times for gen-set delivery to dealers: Over 30% of dealers interviewed this quarter cited long lead times and lack of inventory as a reason that their sales would be affected in the upcoming quarter.  The lack of available product is delaying their sales pipeline.  This was most specifically targeted with the smaller end of the range for residential and some small commercial standby sets (<50 kW).

• The waiting is over: Interestingly in Q3 2020 we did not hear as much as we normally do in an election year of consumers taking a “wait and see” approach in the run-up to the presidential election.   In Q4 2020, we did hear (in retrospect) that some dealers are now reporting that their customers are feeling that since the election is over and the pandemic is not so “new” any longer they are now ready to move forward with quotes and purchases.

• Weather: As we reported last quarter the weather effects are varied depending on the region of the country.  The Q4 reporting period is always varied because some parts of the country see more activity during the winter months and the end of the year whereas other parts of the country see less activity during the winter months as hurricane season has passed.

When asked, “What changes have you recently noticed among particular customer groups or product categories within your market?” there were several comments that emerged as common themes.  Many of these are comments that have carried from quarter to quarter, but this is a sample of some key observations:

• Significant increase in demand from residential for standby generators due to COVID-19 and general security of energy supply concerns.
• This is a repeat from last quarter but even more pronounced in Q4 2020 as inventories declined overall by 8.3% in Q3 2020 and 19.1% in Q4 2020.  There is a severe shortage for gaseous fueled gen-sets <50 kW.  In many cases there is a short-term demand that may result in a lost sale if they cannot guarantee shipment within a certain timeframe.
• This has generally been an older demographic but there were a few comments this quarter that indicated a wider age range of interested customers including a definite younger end of the demographic too.
• This relates back to the shortage of supply.  We typically see several comments from dealers about customers shopping around and bargaining on price; in this quarter there were no comments relating to price sensitivity.  If the product is available, the customers are willing to spend.  PSR

Joe Zirnhelt is President and CEO of Power Systems Research

SUMMARY: Our PowerTracker^TM dealer and distributor survey of 200 respondents reported that gen-set sales recovered some momentum in Q3 2020 up 11.9% from Q2 2020 levels.  This increase follows a slow start to the year in Q1 2020 where overall dealer reported sales were down 9.8% from Q4 2019 levels and Q2 2020 where we observed a quarterly increase of 4.5% over the low Q1 2020 levels.

The only part of the market that seemingly did not recover in Q3 2020 was the diesel <20 kW with -8.3% for <10 kW and -3.6% for 10-20 kW.  The remainder of diesel (>20 kW) had single digit quarterly increases across the power ranges.  The gaseous fueled gen-sets had the most significant rebound this quarter with all power ranges up to 500 kW with a greater than 10% quarterly change – helping to offset the weak first half of 2020 as concerns and shutdowns ensued over COVID-19.

The data comes from the proprietary PowerTracker^TM series of syndicated surveys conducted each quarter by Power Systems Research. A total of 1,100 interviews are completed each quarter with gen-set dealers and distributors and businesses across North America.

Considering changes by application, Portables and Standbys carried the recovery this quarter with quarterly increases of 10.1% and 17.8% respectively.  Demand in all other application categories remained relatively flat including Temporary, Peak Shaving, Baseload, and Cogeneration compared to Q2 2020 levels. This translated into a 13% increase in sales to Private Consumers and increases from 3% to 8% to Institutional, Commercial and Industrial end users.

On a Year-on-Year basis, overall unit sales for Q3 2020 were up 9.2% compared to sales levels in Q3 2019.  This highlights the increase in demand or rebound as consumers have started to spend in 2020 after the slow start to the year with the onset of the COVID-19 pandemic.

In Q3 2020, dealers reported inventories declining by 8.3% from Q2 2020 levels.  As demand has spiked in Q3 2020, many dealers reported they cannot get the product in to meet customer demands.  The situation with residential and small commercial standby for gaseous fuels seems to have the longest lead times on product shipment to dealers. Year-on-Year, inventories are down 7.9% in Q3 2020.  This is from a Year-on-Year change of 1% in Q2 2020 representing a total 8.9% change in one quarter when considering Year-on-Year inventory levels in Q3 2020 relative to Q2 2020.  Again, this seems to be due to dealers not being able to receive needed inventories and not the case the dealers are hesitant to place orders for new inventory.

METHODOLOGY: Since 1998, Power Systems Research (PSR) has been continuously maintaining its PowerTracker^TM series of syndicated surveys, conducting 1,100 interviews each quarter among two key respondent groups in North America: gen-set dealers and distributors, and business consumers.

We conduct 200 interviews each quarter among dealers and distributors; the focus of this survey is on recent sales and market observations for the current quarter as well as expectations for the coming quarter.

Our Business Consumer survey consists of 900 interviews per quarter among a wide cross section of businesses to gather their input concerning ownership, usage trends and motivating factors for purchase, including any concerns about the reliability and availability of electric power.

Dealer/Distributor Outlook for Q4 2020

Expectations of quarter-to-quarter sales growth in Q4 2020 varied depending on the power range and fuel type.  Sales for diesel fueled sets are expected to be positive in the low single digits reflecting a slight recovery and fulfilling some of the commercial and industrial demand that has been withheld due to COVID-19 during 2020 year-to-date.

In contrast, sales expectations for gaseous fueled gen-sets will see some leveling in demand during Q4 2020 after the high sales levels observed in Q3 2020.  Most ranges for gaseous fueled gen-sets are expected to be flat in Q4 2020 with the highest increase for the 301-500 kW range at 4.7%.  This may reflect the same sentiment for diesel where commercial and industrial end users of diesel may start to spend after COVID-19 fatigue and a better sense regarding any looming business uncertainties.

When asked, “Why do you expect sales to change in the upcoming quarter?” comments from dealers focused on the following market observations:

• Longer lead times for gen-set delivery to dealers: Long lead times are hampering sales particularly with the smaller end of the range for residential and small commercial standby sets (<50 kW).

• Power Outages and Uncertainty: Many comments from dealers focused around some “fear-purchases” and general feeling of security which is driving many age groups – both younger working class and elderly alike, to consider a standby purchase for their home.

• Weather: We observed a variety of responses mainly due to regional considerations. Now that we are past a very active hurricane season and wildfires – this will dampen sales; dealers in other parts of the country are expecting the sales to increase due to winter storms.

• Election Effects: Normally we observe a relative slowdown during the second half of an election year leading right up to election; this year was different where there was less discussion from dealers citing a slowdown in sales until after the election.  This may be an underlying factor in purchase decisions, but it has seemingly slipped away from the discussion as COVID-19 and weather (hurricanes) tended to drive the comments this quarter.

When asked, “What changes have you recently noticed among particular customer groups or product categories within your market?” there were several comments that emerged as common themes.  Many of these are comments that have carried from quarter to quarter but the following is a sampling of some key observations:

• Significant increase in demand from residential for standby generators due to COVID-19 and also portables for recreational activities including camping.
• Many dealers reported long lead times from manufacturers.  In many cases there is a short-term demand that may result in a lost sale if they cannot guarantee shipment within a certain timeframe.
• In previous quarter we reported that there was a reluctance to spend due to the onset of the pandemic; this has shifted as the pandemic has progressed with consumers now willing to spend and being less price-sensitive in many cases. PSR

Joe Zirnhelt is President and CEO of Power Systems Research.