Euro Auctions - Industrial Plant Auctions, Construction Equipment Auctioneers, Agricultural Equipment Auction

Euro Auctions - Industrial Plant Auctions, Construction Equipment Auctioneers, Agricultural Equipment Auctions

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Going, Going, Gone
By Jonnie Keys, Euro Auctions

It’s no secret that the auction market is very buoyant right now, from hand tools and small plant right through to large earth moving and mining equipment. Every ‘jack the lad’ can conjure up an auction and that’s exactly what seems to be happening, to the detriment of both seller and buyer alike and the good name of more reputable organisations like Euro Auctions.

Why the plant explosion and why are many agents and general auctioneers getting into heavy plant? As the article in the last edition of Machinery Movers alluded, repossessions are high and liquidators are responsible for moving vast quantities of assets, which include plant. General auctioneers are accepting mixed inventories from liquidators as are plant agents who are turning to the auction market by way of diversification.

With the readily available amount of plant stock coming onto the market, there is panic selling by vendors into auction houses which take the equipment at the last minute with no thought on which  potential customer is affecting global prices. But what of the disreputable and decidedly dodgy auction houses compared to the larger more responsible ones? Well it’s like comparing a Molotov cocktail to a pint of stout. What’s that I hear you say? Use your imagination. You’ll work it out.

An added advantage that the larger plant auctioneers have over the smaller operators is market knowledge. Many of the vendors known to Euro Auctions have also been buyers so we know the equipment they have and can offer them the best advice on where and when to sell to optimise the price. With market prices down, all vendors want to achieve is fair market value, knowing that the seller has done his best and the asset has achieved what it is making at every other auction worldwide.

We are seeing a lot of vendors buying equipment at local auctions, then entering the asset at a Euro Auctions sale. Local auctions and new auctions have their place, but their organisation and structure means they are dependent on local buyers, with the next impact being lower prices. The merit of choosing a large reputable plant auction specialist is simple. The secret to achieving market price is presentation of the asset, that is advertising it properly, presenting it appropriately and having the right mix of buyers both local and international who will compete aggressively ensuring a higher price – this is what we offer at Euro Auctions.

 

From its conception in 1998, Euro Auctions stamped its mark on the industry introducing the now famous American-style parade of equipment and lots which has become a trademark of all sale days. Notable services available to the customer include an in-house transport team who can assist with transporting and shipping assets all over the world, as well as the Live Internet Bidding facility (which is growing and now accounts for 10% of all sales). With such an international business, Euro Auctions also has a policy of employing staff with the appropriate language skills as well as technical ability.

But what is the real news from the auction ring? Where is the plant from the home markets going? How are prices holding? What will overseas trading do to the market place? Let’s investigate. Firstly, construction companies and plant operators are shedding stock at an alarming rate of knots. Driven by the banks or finance companies, repossessions are not the end of the story. With prices at auctions offering bargains for many, shortfalls are still leaving the funders out of pocket on the sale of a piece of equipment, leaving the funder to return to the cash-strapped previous owner for the balance. This is a very vicious circle.

But how does this affect the market? What is becoming apparent is that constructors, main contractors and large building firms are now selling their plant assets in favour of renting plant at the time that the project dictates. Whilst the downturn has seen plant yards mothballed, logistically it’s not economic for them to manage their plant infrastructure any more, considering servicing costs, standing time and management.

What this also does is to tempt the palate of overseas buyers or exporters in this country. During the last Euro Auctions sale in July, 49% of equipment sold was exported overseas, an increase of 2% over the previous sale in May. This is still a slightly grey market as we are aware that many new buyers in the UK market are overseas nationals now residing in the UK and whilst many lots are bought by UK residents, we feel that this plant will also find its way to Africa, Eastern Europe and the Middle East. So the plant destined for overseas countries could be as high as 60% to 70%. Euro Auctions can also report that over 50 new vendors sold at the last sale held in July at Leeds, with 50% of first time registered buyers actually purchasing at the sale.

Do plant auctions help to stabilise new plant prices? Do plant auctions damage the cost of second hand plant? With so much plant going overseas, what effect will this have on the market? The answer to all these questions is pure conjecture, however it could be good news for all concerned. The effect can be threefold: the market floods with second hand plant, prices are forced down and rental becomes attractive again. As the market strengthens, hire firms will be driven by demand to supply higher levels of equipment. This will result in reputable plant hire companies increasing stock levels.  With the cost of borrowing at an all-time low, the smart money would be to lease new stock, which would be good for manufacturers in the UK, Europe America and the Far East.

What of emerging markets? Which are strong, which are weak? Where is all the plant going? The statistics for each sale show that Eastern European countries, such as Bulgaria, Romania and Hungary, seem to be still struggling and were not well represented at recent Euro Auctions sales. These countries are very dependent upon Western funds. Polish buyers were notably present at the last sale in July, spending over £1 million at the auction, equating to 7% of the total sale. Cyprus was another country showing strong signs of growth and buying well, so would be one to watch.

North Africa is the rising star. It is growing at an alarming rate and the demand for plant is increasing; Euro Auctions is seeing a 100% growth per auction in plant going to North Africa. It is the single fastest growing market in the world. Egypt and Libya are also becoming big spenders. We saw the first appearance of countries like Tanzania and Liberia at the sale in July. Why? Perhaps it is due to cheaper and more accessible shipping. Time and statistics will tell. One unsurprising statistic is that Western European countries such as France, Germany and the Netherlands increased as a percentage of overall auction total, as did Finland. However, Irish participation has dropped significantly since April 2009 with spending down more than 50%.

So what of the future? Time will tell however, as all these markets feed off each other. New entrants into construction need small plant. Emerging global markets want bargains. Having a spring clean of the plant cupboards is good for manufacturers. Off loading plant departments is good for the hire companies. One thing is for sure, unlike the smaller players, the larger plant auctions like Euro Auctions are going from strength, to strength and are here for the long haul. This is not a case of Going, Going, Gone!

Contact Euro Auctions
72-74 Omagh Road - Dromore - Co Tyrone - Northern Ireland - BT78 3AJ
Tel: 0044 (0) 2882 898262
Email: info@euroauctions.com
Web www.euroactions.com


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