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Following the recent successes of the heavy plant and machinery sale by Euro Auctions, in Dubai, Plant & Equipment Middle East wanted to know more about the used plant and machinery markets across the region, interviewing Derek Bleakley, Euro Auctions, General Manager
Q - What do you attribute the resounding success of this auction to, as you mentioned the interest as compared to March 2019 was 100 percent more as well as the number of lots on sale, their prices, bidders and eventual buyers?
A - Over the last 24 months, we've been working hard to get to know consigners and buyers in the Middle East, and working with them to establish good working relationships and trust. . We have regular consignments of good stock coming through the auctions, in the right quantity and of a quality that buyers want. And in doing this, we are getting happy customers who are returning to Euro Auctions to sell and buy at each sale, contributing to the uplift of over 100% in all statistics over the same sale in March 2019.
Q - Could we say this was also a sign of panic buying for the used construction equipment industry in the region?
A - This industry does not panic buy. The industry buys strategically for customers or for upcoming projects. The arrival of Covid-19 and its effect has been coincidental and was not an influencer on the result of the recent Euro Auctions sale. In mid-2019 there was a marked 'up-take' in the market for good machines, however contractors and rental companies in the Middle East have been buying relatively low levels of new machines for the last 4 to 5 years, and as a result stocks of plant are aging. Not buying through dealerships, buyers have turned to auctions for good late year machines as well as new unused stock. With oil prices now falling, in the future there may be a case of panic selling to generate cash-flow in short term, as opposed to panic buying.
Q - Considering that the auction was held just before measures to control the spread of the virus were put in place by multiple governments in the region, in your opinion, how could demand have been so great?
A - During the last Euro Auctions sale, buying speculation was high, with buyers looking for a deal. The equipment on offer was of a high standard, and as a result, prices were strong. At the time of the sale the exchange rate of the Euro to the Dollar was high which attracted more European buyers to the sale.
Q - When it comes to curating the lots that go on sale, how is the selection process, what is the criteria and how much benefit does the seller get when they choose to put their equipment on sale with your auctions?
A - What sets Euro Auctions apart from its competitors? Firstly, being realistic, in our valuations of machinery and equipment, as opposed to over-valuing, only to disappoint consignors when the hammer goes down. That alone brings repeat consignors. Secondly, our transparent commission structure lets our consignors know exactly what they are going to pay in costs before the sale, with no hidden charges, for ancillary items such as: fuel, washing, unloading, loading, just to name a few.
Q - In terms of your marketing reach to get bidders and buyers interested, how is that done and how long a process is it before the actual sale?
A - Marketing starts about 8-weeks out from the date of the sale. In the Middle East online marketing works better than any other mechanism, and we are using pre-auction video via YouTube and other social platforms, plus WhatsApp and Google AdWords. In addition, the Euro Auctions global campaign includes marketing to buyers and sellers in over 95 countries, using off the page advertising, brochure direct mail, and finally targeted public relations and media campaigns.
Q - Coming back to the pandemic, what do you think will be the first indication of a healthy market after this virus is successfully over?
A - When construction and infrastructure projects resume after the pandemic, there will be a shortage of machinery due to the hold put on fleet replacement programs and the sale of plant to generate cash flow. Hire businesses will want to replenish their stock levels, as they do on a regular basis. Construction companies will be buying for projects, and new equipment will be in short supply. As a result, buyers will be looking to the used machinery markets and, auctions, which is good for sellers.
Q - How had the used construction equipment industry been faring in the region in general till early March?
A - The market was improving in 2019 and into early March 2020. Growth was positive, demand for quality machinery was showing green shoots, and the demand was evident. Euro Auctions has the confidence of the consignors, and the trust of the buyers to present for sale some of the best used equipment on the market.