The current situation at Covid19 is forcing many companies to reduce their capital costs. Thus, increasing the demand for used heavy equipment and machinery.
Current Trends and Demands
- According to Global Market Insights, recycling Equipment and Machinery are expected to account for nearly 6% CAGR from 2019 to 2026. Due to the industry’s granular structure, players are offering strategic investments to improve their overall capabilities worldwide to meet consumer needs.
- In the construction sector, Mordor Intelligence mentioned that the European Used Construction Machinery Market is expected to record almost 3.98% in the forecast period (2020-2025). The reason is economic uncertainty and rising costs for purchasing new equipment. In addition, local and local businesses contribute 60% to the market.
Dennis Howard, vice president of RDO Equipment, said the used equipment market, in particular, saw growth in terms of technological growth. And with more machines already equipped with options such as GPS controls, which hit the used equipment market last year. This is a trend that will continue to expand in 2020.
- Gordon Brothers state that the cost of used metalworking equipment has decreased from 10 to 30% per year, depending on the type and year.
- Ritchie Bros’ internal data and trend analysis team noted relative price stability in all geographic areas used by Ritchie Bros.
- Greg Peterson, the founder of Machinery Pete, said in an article that to help farmers more easily accept online bids, bidders distribute purchase premiums.
- Sales of second-hand fitness equipment and other fitness products have increased because people cannot go to gyms due to social distancing norms.
- Refurbished equipment in the food and beverage sector could save 50% of companies in the ballpark, said Sanders of United Food and Beverage. One per item, EquipNet’s Medicino estimates savings of $ 50,000 to $ 300,000, depending on OEM and total machine capacity.
- The improvement in sales of used agricultural machinery in the period ending June 30, 2020, helped many retailers to make a year-on-year profit of 9.9%.
- An Evercore ISI survey found that used equipment inventory sales improved to their highest level since 2009.
- Participation in online offers has increased.
Points To Watch
Trends and requirements, and updates are regular. But, to predict weather forecasts and trend activities will last or only change for a short time. And to have a general vision, we need to look for similar points.
Industry Outlook and Demand
It will take longer for the world economy and transport to normal. Therefore, demand for equipment is likely to remain low. Although we are cautious optimists, investing in new machinery is not something many companies can do. This creates an opportunity for the used equipment.
Low New Inventory
Since after lockdowns and high demand for work equipment, the supply of new machines may not meet the demand. If demand and the number of specialized parts decrease, it will slow down the production flow of new machines. This is another factor that makes the used heavy equipment very positive.
Equipment rental offers the same benefits as used equipment against the new; many dealers expanded their fleets by renting to maintain the demand for machine rentals. To conclude, this will make the machines more useful.