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Day: December 27, 2024

When is the Best Time to Sell or Lease Equipment?

Disclaimer: this article is Original published by Machinery Intelligence Station. This article is based on foreign media reports and does not necessarily represent the views of our channel. Sources: https://mp.weixin.qq.com/s/ZwHHH-QJRLAmZUM1ZhQ1Tg Deciding when to sell a construction equipment leasing fleet is a critical decision that can significantly impact the profitability and operational efficiency of leasing companies. (Translated and adapted from Rental Briefing reports) Surplex, a German digital auction house for used machinery, advises businesses to consider a range of factors when determining the timing of fleet sales, such as tax incentives, accounting needs, storage space, and cash flow. Surplex points out that year-end, meaning right now, is typically an ideal time to sell second-hand machinery inventory. It notes that selling machinery in this timeframe can help industrial companies: 1. Reduce tax burdens and unlock targeted deduction opportunities; strategically allocate profits and losses to optimize expenses, laying a clear foundation for investment planning for the new fiscal year; 2. Free up capital and reduce inventory, streamline the balance sheet, improve liquidity, and provide a solid financial basis for year-end settlements. 3. Make room for modernization and production adjustments in the coming year. 4. Ensure the new investment budget for the next year; 5. Take advantage of high year-end demand, as many companies wish to use their remaining budgets for investments and are more inclined to purchase used equipment rather than new, for immediate use. In August 2024, TBAuctions, a European multi-brand B2B digital auction platform for second-hand goods, acquired Surplex, which also owns and operates several brands, including Troostwijk Auctions, Europe's largest online industrial auction company. 图一 Market Demand American commercial assets and vehicle auctioneer, Ritchie Bros., stated in November 2023 that the best time for businesses to sell equipment was at the end of that year. This conclusion was for different reasons than those of Surplex. Ritchie Bros. pointed out that during times of market downturn or generalized uncertainty, equipment owners tend to hold onto their assets longer, as seen during the supply chain disruptions post-COVID pandemic. The company suggested that businesses consider selling off equipment to clear out storage space as the supply chain disruptions of 2022 had eased by 2023. Furthermore, it noted that companies should also aim to sell when the market is on the rise, as the final quarter of 2023 would mark the transition from a seller's to a buyer's market, with future markets favoring buyers. Some large rental companies in the United States reported strong growth in equipment rental sales last year. For example, United Rentals saw its equipment rental sales increase by 63% year over year in 2023, reaching 1.57billion. The company said it deliberately delayed equipment sales in 2022 to ensure its leasing capacity was sufficient to meet demand. However, United Rentals' rental equipment sales growth did not continue this year. In the January-September period of 2024, the company's sales fell 5.9% year-on-year to $1.07 billion. The "Sweet Spot" for Selling Euro Auctions, the operator of Europe's largest construction machinery auction platform in Leeds, claims that market cycles, equipment brands, models, usage, and type of work can all affect auction value and impact the timing of equipment sales. Euro Auctions advises rental companies to find the "sweet spot" for selling their equipment by balancing resale value against depreciation. It notes that sometimes rental companies may not be able to command high prices for newer equipment. "During market booms, high demand and a rise in prices allow companies to sell barely-used equipment at prices close to the original cost, especially for high-end brands that are in global demand," it suggests. "For instance, the rise in costs from 2021-2023 led buyers to pay significantly higher prices for new equipment. This allowed rapid fleet turnover, keeping the equipment age low." "But in 2023-2024, as demand slowed and supply increased, second-hand equipment prices fell, leading to severe depreciation of equipment that was only 1-2 years old," it explains. In such cases, retaining the equipment for 3-5 years, until depreciation is more controllable, is often more cost-effective than selling early. Euro Auctions also states that maintenance costs now play a key role in the timing of sales. High-frequency equipment may require earlier replacement in harsh environments, while low-frequency equipment can maintain its value better. According to Euro Auctions' analysis, under current market conditions, holding rental equipment for 3-5 years typically garners the best resale value. Keywords: 1. Second-hand bulldozer market 2. Second-hand excavator transaction 3. Used compacting machine prices in Canada 4. High efficiency pile driver used

Disclaimer: this article is Original published by Machinery Intelligence Station. This article is based on foreign media reports and does not necessarily represent the views of our channel. Sources: https://mp.weixin.qq.com/s/ZwHHH-QJRLAmZUM1ZhQ1Tg   Deciding when to sell a construction equipment leasing fleet is a critical decision that can significantly impact the profitability and operational efficiency of leasing companies. […]

Analysis of Russian Mining Machinery Imports

. Large excavator made in China 2. Heavy dozer made in China 3. Heavy excavator 4. Large wheel loaders

Disclaimer: this article is Original published by Machinery Intelligence Station. Sources: https://mp.weixin.qq.com/s/B0FrAKf_QCkMQ_DxWyOM-w Manufacturers from China and other Russia-friendly countries have not only replaced companies that have exited the market but also increased import volumes, laying a good foundation for a competitive environment. New brands from India and Turkey are emerging, while parallel imports continue. (Reported by […]

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