By Tom Andel, Contributing editor
June 28, 2010
Lift trucks: Why buying may overtake leasing
Judging by the latest Equipment Data Associates (EDA) report, there's a huge downward trend in lift truck sales. But is Bruce Pelynio worried? Not a bit. As president and CEO of Heli Americas, Memphis-based distributor for China's Anhui Heli lift trucks, he sees a trend toward lift truck ownership rather than leasing. The EDA reports track trucks that are financed, and these days financing is hard to find, he says.
"People are being forced to buy through non financial merchandising means because the banks aren't loaning money like they used to," he told me. "People are using in-house financing or cash to purchase lift trucks. There aren't as many players involved in commercial financing for lift trucks as there were two years ago."
If that's true, it makes sense that buyers are looking for products they think will give them more than four or five years of life. But that also makes maintenance more important, especially as trucks survive past their warranty. Pelynio sees that as one of his greatest opportunities, particularly with IC trucks. He says he has won four major accounts from competitors in the last six months solely because these clients didn't want to pay for long term maintenance on the more sophisticated equipment they had been purchasing.
"The guys who buy gas powered trucks tend to do their own service and they don't like the fact that they can't do that any more," Pelynio said.
And with diesel standards changing in 2011 thanks to new EPA guidelines, lift truck manufacturers will have to deal with more expensive engines, therefore buyers will have to deal with more expensive lift trucks. But cost won't be the only problem. Manufacturers face design challenges. It's one thing to put urea injection and afterburners on a big 20,000 pound fork lift, but where does that technology fit on a 5,000 pound pneumatic?
"Because of that I think we'll see people go back to LP or gas power for those size trucks and away from diesel," Pelynio told me.
On the electric side, he sees fast charging opening doors for these trucks at facilities that were traditionally LP. Take trucking operations, for example. They typically don't have room for charging stations in truck terminals. But fast charging fits the typical operating pattern for lift trucks at these terminals. They are run full out for three or four hours and then sit for two or three. During that window of opportunity, fast charging allows users to charge the batteries while they're still in the lift trucks. So, does Pelynio expect to see a widespread upswing in fast charging very soon?
"Not many people have bitten because the up front costs are more expensive," he admits. "However in California where emission regulations are getting so onerous, you'll see people looking at it more."