Glut of second hand plant depresses market for manufacturers

The abundance of young second-hand plant on the market will depress sales of new machines for two years, according to Off-Highway Research managing director David Phillips.

He said last year's long lead times caused users and dealers to bring forward orders they would normally have placed in 2009.

By the time the market started its rapid decline, these machines had been built and many are now sitting in dealers' yards.

"Some dealers won't need stock for another 12 months," said Phillips. He doesn't expect many others to reorder in the first half of 2009, as many users can buy quality used machines.

He expects new plant sales in Europe to fall to around 130,000 units in 2009, from a peak of 210,000 in 2007. "I've never seen it so bad in 30 years," said Phillips, who predicted the recovery may not start until 2010, with a further three years for sales to return to the normality of 2004 levels (150,000 units).

The worldwide fall in house prices resulted in a dramatic decline in sales of high-volume units like telehandlers, mini excavators and backhoes. Phillips said plant sales in the UK and Irish markets have been particularly badly hit as "the rental companies took fright first". He described Spain as "a basket case".

Over the next two years, Phillips predicts plant manufacturers will consolidate, and while not naming any companies, he said Chinese producers could benefit from the upheaval.

"The Chinese have the manufacturing capability and would benefit from acquiring a known brand name, modern designs and an established distribution network," he said.