Study Shows Lifting Equipment Buying and Selling Trends

May 5, 2004 - A study produced by AED (Associated Equipment Distributors), Oak Brook , Ill. , reveals buying habits and forecasts trends in the distribution of construction equipment. Lifting equipment-including scissor lifts, boom lifts, rough-terrain forklifts, telescopic boom cranes, lattice boom cranes, and knuckleboom cranes-was one of the seven product categories that the study examined.

It's noteworthy that respondents who purchased lifting equipment were less likely to buy from an independent authorized dealer than buyers of other types of construction equipment. They also were more likely to buy from rental companies than were buyers of other equipment. Additionally, more respondents purchased lifting equipment directly from the manufacturer than any other product type.

Likewise, distributors who were surveyed supported this claim, saying that manufacturers are selling less lifting equipment through authorized dealers. Distributors predicted that the distribution channels for lift equipment will continue to see increased sales through rental companies and more direct sales.

For aerial work platforms and rough-terrain forklifts in particular, the tendency away from traditional distribution channels is not a new phenomenon. Rental companies helped create the market for these machines and have dealt directly with the manufacturers from the beginning. One distributor commented, "These products are so rental-oriented that I'm not sure there is enough service volume to support a 'traditional' distribution organization."

Ten manufacturers of lifting equipment responded to the survey. According to them, they expect a slight decline in sales through authorized distributors, from 56.9% in 2002 to 54.4% by 2005, and a slight increase in sales through rental companies, from 24.9% to 26.3% for the same period.

One manufacturer representative commented, "End users do not seem to value distribution. Manufacturing capacity has lowered the transaction prices, making the product category [lifting equipment] more commodity-like." And another predicted, "Some manufacturers will continue to set up their own rental store operations in order to reach end-users more cost-effectively."

Purchase Plans

Highlights from the Lifting Equipment portion of AED's "Construction Equipment Marketplace Study Report," are reprinted here with permission. The study was conducted in December 2002 and January 2003 and published in June 2003.

More than 58% of respondents who purchased lifting equipment in 2002 planned to purchase the same amount or more in 2003. Of those, 22.7% planned to buy more scissor lifts in 2003 while nearly one-third planned to purchase the same amount as the year before. Among forklift buyers, 62.7% planned to buy the same amount or more equipment. Not surprisingly, when compared with lattice boom and knuckleboom cranes, the crane category with the largest percentage buyers expecting to purchase more equipment in 2003 was hydraulic (telescopic boom) cranes. Not only does there tend to be more technological innovation in this category, which includes all-terrain cranes, but it also includes more products that are appropriate for the rental market, including rough-terrain cranes. As many as 12.7% planned to buy more in 2003 and 47.6% planned to buy the same amount.

Respondents who said they planned to purchase lifting equipment were asked to specify why they planned to do so. The top three reasons given were:

Replace existing equipment in fleet-35%
Upgrade equipment with newer technology-25%
Increased work volume-22%

Also significant is that 18% planned to buy because they needed specialized equipment and 16% needed equipment for special projects.

The key reason given by those who planned to buy less equipment was that they are choosing to keep equipment longer.

The entire report, including useful comparison charts, is available through the AED for $490 (non-members) and $245 (AED members) at info@aednet.org .