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Used Equipment Prices Are Strong Right Now. Here’s Why.

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Supply chain constrictions, industry demand for certain types of equipment and a construction market that’s proven resilient are all leading to a current strong demand for used equipment, according to an industry panel.

Sponsored by Ritchie Bros, the panel included three Ritchie used equipment experts and a dealer, Michael Vazquez, vice president of Miami, Florida-based MECO Miami.

Supply side issues are contributing to the picture, Vazquez said, with customers waiting three to four months for both large and compact excavators from certain brands. “We’re seeing an enormous problem when it comes to the new side, and I think it’s only going to get worse,” he continued.

And on the used side, “everyone’s looking for late model equipment, but it’s difficult to source right now,” Vazquez said.

“I think we’ll continue to see healthy increases in pricing until the supply chain issues even out,” added Doug Olive, Ritchie senior vice president, pricing.

Still, Vazquez said 2020 turned out to be a “very good year. Our business, for example, was up 20% in 2020 from 2019,” he said, crediting the booming Florida market.

And overall, said Vazquez, “Associated Equipment Distributor members are seeing a tremendous amount of growth on the smaller side of equipment.” (Vazquez was also speaking as an AED board member.)

In 2020, telehandlers were strong in terms of number of units sold on both the auction side (Ritchie Bros.) and retail side (Rouse). Not so strong: wheel loaders and dozers.In 2020, telehandlers were strong in terms of number of units sold on both the auction side (Ritchie Bros.) and retail side (Rouse). Not so strong: wheel loaders and dozers.Ritchie Bros.

Overall, “there was an uptick in some of the assets we sold, especially with telescopic forklifts, compact track loaders and scissors,” Olive said. “There was solid demand throughout the year for all of those assets.”

Retail

“Aerial lifts and telehandlers are rental-first equipment and a lot of rental companies have been cycling over their fleet after those fleets grew substantially” in the past few years, said Doug Rusch, managing director, Rouse Services, a Ritchie division.

Retail pricing has followed suit, Rusch said. (In addition to auction prices, Rouse tracks private retail transactional sales for more than 200 large North American fleet owners.)

“Demand is matching up nicely with sell off, and when you have that dynamic you have a lot of stability in retail values,” Rusch said. Retail prices in 2020 were just 3 percent lower than in 2019, according to Rouse’s retail value index, which tracks fair market value prices.

“We really did not see a Covid-19 trough in the retail marketplace,” Rusch said. “This is quite a remarkable statement given all the headwinds.”

The retail value index is important to dealers, said Vazquez, because it’s something banks closely watch. If prices plummet, banks are less likely to lend. “About 70% of our deals are still retail deals,” he said, “and the residual value of our products is essential to maintain a strong number at the end.”

According to Rouse figures through January of this year, the average age of retail equipment sold was 64.4 months. This number has been trending upwards since January 2019, when the average age was 50.1 months.

Auction pricing

On the auction side, the Rouse Forced Liquidation Value index is showing that pricing “is seeing a remarkable recovery, with 5% higher auction prices than last January,” Rusch said, and 11% higher than in spring Covid trough. “The pricing is quite strong.”

Ritchie said U.S. heavy equipment auction prices have strengthened compared with the same time frame a year ago. The company’s Mix Adjusted Use Price Index shows that prices have gone from a year-over-year 3% decrease at the end of March 2020 to a 5% increase at the end of February this year.

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The shifts were more dramatic on the lift and material equipment side. Prices for these machines in the company’s Mix Adjusted Use Price Index went from minus 7% in March 2020 compared with the same time period in 2019 to an increase of 9% in February, when comparing it to February 2020. 

There has also been a depth of market along with the strong demand, according to Olive.

“If we can find the assets, there’s depth to the asset sectors,” he said. “Where we didn’t see depth year ago, there certainly is now.”

“There is so much strong demand in the marketplace.” Olive added. “All you have to do is look at indicators such as our watch lists, PriorityBidding and site visits.”

Ritchie, which has been running online-only auctions since the pandemic broke, has seen its PrioirtyBid option open up in the virtual environment, said Kevin Kobus, Ritchie’s vice president, U.S. live auctions and operations.

With PriorityBid, bidders can set a maximum proxy bid on a piece of equipment, one that will increase incrementally up to the maximum account.

“They don’t have to worry about overpaying for it or losing it if they weren’t able to be in front of their computers when it was sold,” Kobus said.

Virtual vs. live

Videos have become more important in the machine inspection process, and Ritchie is exploring a “concierge-type” service where prospective buyers will ask questions virtually while an inspection is occurring.

Another option, one the company is looking to expand, is what Ritchie terms a “virtual sale,” where an inspected machine is sold where its located instead of being transported to a Ritchie sales facility. One of the top sellers in the company’s recent Orlando event — a $460,000 2015 Cat 374F L excavator with 2,698 hours — was a virtual sale.

Which raises the question, are live auctions a thing of the past?

Kobus left the answer open. “That’s under evaluation,” he said. “Certainly, there’s a social aspect to a sale, but it’s all about choice. As we collect this data, we’re going to evaluate what the auctions of the future look like.”

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Volvo electrifies 22-metric-ton excavator

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Taking the next step to battery power for its machine lineup, Volvo Construction Equipment has electrified its first large crawler excavator as a customer pilot.

Designed and built at the Volvo facilities in Changwon, South Korea, the 22-metric-ton EC230 electric excavator, which is not yet commercially available, has been tested by customers in South Korea and China. Now the EC230 E machines are due to come to North America for demos.         

Studio shot (white background) of Volvo EC230E excavatorThis marks the first large excavator that Volvo has electrified.Volvo CE

Remi Teysseire, excavator product manager, discussed some of the high points of the EC230 at the recent Volvo Days event. 

During his presentation, he said it offers the same features as the EC220, the diesel-powered conventional excavator in the same size class. 

“We can bring the same tool size. We have the same digging forces, the same lifting capacities with the added value to have less noise and zero emissions,” Teysseire said. 

With its battery power, the excavator is expected to achieve 60-70% reduction of energy running costs compared to the EC220. Teysseire said the EC230 E is equipped with four 66-kilowatt lithium-ion battery packs that enable the operator to work four to five hours in general purpose applications. With a high-power fast charge on a lunch hour, the machine should last through a full eight-hour shift.

He said Volvo is working on various power supply options for jobsites, including a faster charger and onboard chargers, which some of the machines are already equipped with. 

Hydraulic pumps are identical to those for the EC220, providing the same performance, except they are now driven by an electric motor. “We are consuming electricity only when the operator needs to work with the machine,” Teysseire said. “In other words, the idle time is gone.”

The EC230 E marks the first time Volvo CE has developed electric customer pilot machines for China. These excavators are not commercially available yet, but during this research phase, Volvo CE aims to mature them quickly so that they can be commercialized as soon as possible. The machine was first showcased at bauma China 2020.

“China is the largest electromobility market globally and a leading producer of electromobility components, which provides the demand and means to manufacture a machine locally,” said Mats Sköldberg, head of technology at Volvo CE China. “In addition, China has an industrial strategy to decrease dependence on diesel and so the electromobility market is expected to move quicker. These factors make China the perfect place to test our new machines and gain valuable customer feedback.” 

Earlier this year, Volvo CE opened orders for its newest electric machines, the L20 electric compact wheel loader and the EC18 and ECR18 electric compact excavators. Deliveries of the three newest models to North American customers will begin in 2023.

According to Volvo, as development of the electric machines continues, the diesel versions of Volvo’s compact equipment will be phased out. The compact line of electric equipment is only the first in the line as engineers develop the systems for larger construction machines such as the EC230 E.

“These new machines will drive our activity in a new era,” Teysseire said.

Check out the video below for an intro to the EC230.

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Sany Group enters electric pickup race

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Sany Group, a Chinese construction equipment and large truck manufacturer, is reportedly getting into the electric pickup truck race.

Over the past two months, two sets of images of futuristic-looking electric pickup truck models from Sany have leaked from China’s patent bureau office, according to CarNewsChina. It appears the construction equipment manufacturer is going all-in on a new venture.

Sany’s plans for either design that have been unveiled remain unknown. It is possible both models, which have a more futuristic vibe with one being a sportier style, may be brought to the market, or both could remain design concepts and be used only as promotional tools. 

Still, according to CarNewsChina, it is possible Sany will unveil these electric pickups in November at the Guangzhou Auto Show. For now, these trucks are not expected to be a U.S.-focused product and may only be available in China and elsewhere overseas for testing and release first. Sany North America currently is not involved with this product and has no information on it.

The patent for the pickup is held by Hunan Xingbida Network Technology, which was launched in 2019 with Sany Group as the sole shareholder.

Sany Group electric truck preliminary design photosResembling the Tesla Cybertruck, it appears Sany is going for more of the futuristic style versus the standard truck look.CarNewsChinaPreliminary images leaked in early May had the truck branded as Sany, not Xingbida. The initial set of images have a very futuristic vide, reminiscent of the concept images of the Tesla Cybertruck except a bit bulkier. No specifications are currently available in terms of bed length, anticipated towing capacities or mileage. 

In the first set of images, the vehicle is shown as a two-door vehicle with a large front, low roof and short bed. Side images appear to suggest good ground clearance, and overall, it does appear smaller than a regular full-size pickup.

The second set of images features a more colorful and sportier version of the original concept. Most of the images show a two-door, but this set included one four-door version. Sideview of Sany Group's preliminary electric truck conceptThe sideview of the preliminary concept suggests reasonable ground clearance, a large front, low roof and shorter bed.CarNewsChina

As shared online by CarNewsChina, the unique design features an illuminated Sany badge, small headlights and LED daytime running lights, two large tow hooks and a winch on the front end. The images also show the Sany truck with pronounced front and rear wheel arches that are finished in gray to contrast the rest of the truck’s red paint. It appears to have pop-out handles, that sit flush with the bodywork and has a set of large side steps and handles on the C-pillars.

A shark-fin style antenna maintains the sleek design of the truck, although the sporty red version seems slightly more truck-like versus the more futuristic preliminary photos. Lastly, the sport version noticeably includes a tow hook.

In recent years, a growing number of automotive companies have released or announced intentions of upcoming electric pickup trucks. Some of the models expected to hit the market soon include the 2022 Rivian R1T; 2022 GMC Hummer EV; 2023 Tesla Cybertruck; 2023 Bollinger B2; 2023 Ford F-150 Lightning; 2024 Ram 1500 Electric; and 2024 Chevrolet Silverado EV.

Front end image of sport Sany Electric TruckThe unique design features an illuminated Sany badge, small headlights, and LED daytime running lights which resemble eyebrows, two large tow hooks and a winch on the front end.CarNewsChina

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New V8 Ford Raptor R makes surprise appearance

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Eat my dust.

Not sure if Ford will be adding that classic snub to its marketing lexicon but you can’t help but think they might be considering it following a recent surprise Raptor R visit that left journalists staring at a huge cloud of dust. 

Fox News auto reporter Gary Gastelu reported recently that the V8-powered truck roared into view while reporters were attending a Ford Bronco R event in Johnson Valley, California. 

“An F-150 Raptor R came storming through the desert past the assembled journalists, but not closely enough for them to get a good look,” writes Gastelu who went on to say that the sound of the truck’s V8 “could not be missed.”

Ford CEO Jim Farley tweeted a brief video that shows reporters parked in a lineup of Bronco R’s as the Raptor R blasts into view and does a monster slide and donut before roaring out of view (see video below). 

Ford’s marketing folks definitely get a big thumbs up for pulling off such a surprising and dramatic entrance. Doubtless, the buzz would have been even bigger if the truck jumped over the current Raptor while AC/DC’s classic “For Those About to Rock” jammed inside those Bronco Rs. Yeah…that would have been the best OEM event ever, even besting the helicopter drop of Chevy’s 2019 Silverado Z71 Trail Boss reveal nearly five years back at the Texas Motor Speedway. 

Though Ford’s not talking numbers yet, everyone knows that they need to best Ram’s amazing 702-horsepower TRX. Motorheads were thrilled when Ford rolled out its 7.3-liter Godzilla V8 a few years ago. The big block can be spec’d in Ford’s Super Duty trucks and is available as a crate engine for “those about to rock,” since as Hot Rod magazine put it, the engine “packs monster potential.” 

But arguably there’s been more fingers pointing toward Ford’s other V8s, namely their 5.0- and 5.2-liter. Those engines would cut weight over the TRX’s hefty supercharged 6.2-liter. I’m not so sure though that either the 5.0 or 5.2 would prove all that helpful in reducing the lawn dart effect, that is the tendency of a front-heavy truck to want to nose-dive when airborne. 

Power opportunities with either the 5.0 or 5.2 look promising. Hennessey was able to squeeze 758 horses out of its 5.0-liter V8 Velociraptor, which gives it a 56-horsepower advantage over the TRX. 

Of course, though they’re a little late to the super truck segment, you have to wonder what Chevy has in store. The big reveal of the Silverado ZR2 Bison will take place this summer. Car & Driver reported that the “Silverado ZR2’s 420-hp 6.2-liter V-8, spool-valve dampers, knobby 33-inch all-terrain tires, and electronic locking front and rear diffs should go untouched.” 

Right off the bat, in terms of power, that would put the Silverado Bison behind the TRX and the Raptor, so I’m not so sure I’m buying into the notion of a 420-horsepower V8. Regardless, what an impressive and historic time for pickups. More power and features keep coming. The downside though is historic inflation, which includes crazy high fuel prices like a never-before-seen national average of over $5 a gallon for regular. 

Yes, surging fuel costs make all-electric pickups look more attractive, and with their head-snapping instant torque, it may not be long before they snatch those “eat my dust” trophies away from their ICE counterparts. But getting airborne in an EV? While it won’t be as front heavy and thus as prone to lawn-dart landings, I just don’t like the idea of catching air with a lithium-ion battery pack that, if cracked, can turn into a monstrous torch. I’d rather wait for nonflammable and more powerful solid-state packs. That will obviously take some time, but there’s no doubt that they’re coming.

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