Capital Equipment News December 2020

Market trends Commenting on some of the new trends in the market, Neubert says there is a big shift towards rental as fleet owners avoid large capital outlays associated with big-ticket purchases. “To provide context, before COVID-19, our business was split 50:50 between rental and cash sales. This has since shifted, with rental now contributing 70% compared to the 30% from sales. Many customers are moving to rental as a way of conserving their cash amid the current uncertain business environment. They are not outlaying huge amounts of cash on capital equipment. That’s one of the big trends we have seen in the market,” he says. The other big trend, adds Neubert, is that fleet owners are ‘sweating their existing assets’ rather than investing in new equipment during a period of economic uncertainty. “Instead of replacing, they would rather maintain the existing equipment for longer, thus sweating their assets to postpone their fleet replacement cycles,” he says. Neubert says this approach has been a big contributor to the growth of EIE Group’s aftermarket business. “We are happy that customers are taking the rental route, which bodes well for our operations business because rental units are issued with maintenance contracts. Similarly, it works well for us that customers want to sweat their assets, because we get to provide the parts and service required to keep these machines running for longer periods without any issues,” he says. New realities Commenting on some new realities in the industry, Neubert says customers have become more demanding and the market has become very competitive. “We are now working closely with our customers to help them streamline their businesses and bring down their costs, which is a major issue for them right now,” he says. A big adjustment for industrial equipment suppliers and the capital equipment sector

EIE Group supplies Konecranes lifting equipment, including container lift trucks, reach stackers and forklift trucks.

QUICK TAKE

Despite having to negotiate the uncertainties around COVID-19, the pandemic has had several spin-offs for the industrial equipment sector, but has changed the way companies think about and conduct business

There is a big shift towards rental as fleet owners desist from large capital outlays associated with outright purchase

Instead of replacing their assets, fleet owners are opting to sweat their existing assets by maintaining them for longer, thus postponing their replacement cycles

EIE Group has implemented a full digital transformation strategy that is changing what was the norm, and taking a legacy industry from a paper-heavy production into the digital space

9

CAPITAL EQUIPMENT NEWS DECEMBER 2020