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Home>>news>>The Agent and Used Excavator

The Agent and Used Excavator

Tags:2014-02-20

For the agents of construction machinery, doing horizontal development, the most common way is to increase agency area or agent a new brand or new product series in a area. With the mature development of construction machinery industry, the space has become smaller and smaller. If doing cross-industry horizontal development, considering Chinese agents' environment and situations, it is rarely considered. The other way is to do vertical development. The upstream is manufacturing enterprise, but the scale and strength of domestic agents has decided they cannot expand upwards. Their attention is concentrated to the downstream, problem of used excavators has become inevitable.

After 2002, business of used excavators has got a fast development. It made the used excavators one of the hottest topics among agent enterprise decision-makers. This has got a fully verification in the annual meeting of excavator branch of the China construction machinery industry association in 2006. The agents understand relevant construction information, accumulate good sales channels and have a strong after-sales service. So used excavator business of many domestic excellent agents develops very well. Some of them can sale hundreds of units a year. The development of construction machinery industry has arrived the after-market time. From agents to users, such as maintenance, accessories, renovation and lease, etc. These links will gradually become the agents' important profit points. On the one hand, used excavator business is an important business project when agents go downward. On the other hand, it will promote the development of other downstream projects. So many agents have started used excavator business through different ways. Despite the difficulties, they have obtained good results. For example, some agents has promoted the sales number of new excavators to a certain extent through replacement business. Some agents not only expand the scale of customer base, but also has efficiently released the problem of supplies in the selling season through simple used excavator transaction.

Used excavator business is a tempting cake, if you want to eat, it is a big test for the agents. Firstly, no matter the replacement business or the used excavator transaction, they both have a big request for the investment. This is a test for many domestic newly developed agents on capital investment. Secondly, because of technical level, market experience and shortage of accumulated credit, China has no unified evaluation criteria. Sometimes buyers and sellers can't reach an agreement on the value of used equipment. Thirdly, in foreign countries, most of the replacement ones are 70 or 80 percent new excavators from rental enterprise. In China, most of them are excavators used for over 10000 hours. It is hard to deal with them. Fourthly, the replacement ones got a hit from lots of private transactions. These private transactions cannot be compared with agents on creditability and normalization. But there exists a strong competitiveness on the price of old excavators which the sellers pay attention to.

Methods are always more than problems. Many agents have begun a beneficial exploration to these questions, such as try to imitate experience in the international market to start making their own relatively objective evaluation criteria, repair and innovate the replacement machines to make them return to the market with their reputation, or just leave them for leasing.