Supply chain disruptions and microchip shortage create low supply environment.
The supply chain issues and chip shortage that has gripped the auto industry has affected the equipment industry too. The OEMs (original equipment manufacturers) are experiencing headwinds in producing their products and meeting global demand. There are many factors causing these production blockages, but primary is the difficulty in procuring raw materials due to shipping bottlenecks, plus the well-known global microchip shortage.
This lack of new equipment supply has also caused reverberations in the used equipment marketplace.
“We are seeing a tight supply environment caused by low inventory levels and continued supply chain issues hampering OEMs production levels," said Kari Taylor, Chief Revenue Officer, Ritchie Bros. "Supply chain disruption is out of our control. What's in our control is productivity of our folks and then driving incredible outcomes for our customers.”
And we’ve done just that. Over the last 18 months we have driven unprecedented demand and strong pricing. Our most recent Fort Worth auction in July attracted 11,250+ bidders from 64 countries, which is up 4% from last year and 116% from July 2019.
Tight supply also affects pricing
Equipment scarcity has also affected equipment pricing. Our monthly market trends report, which you can subscribe to free, is showing prices increases in all major categories in 2021. Our latest report, for example, is showing a 30% price increase for skid steer loaders. Our July report also showed a 30% price increase for truck tractors. Aerial equipment, earth moving, and vocational trucks also saw big price jumps in the previous three months.
This unique supply environment presents a compelling question for those holding underutilized assets – is now a good time to sell? What are your assets currently worth in this market environment? We have multiple solutions to help you, or better yet contact us for a no-obligation discussion on what your options are.
Here’s a roundup of news stories that touch on this tight supply topic.
Caterpillar, the Illinois-based manufacturer of heavy machinery, said it has carried out price increases twice this year to offset higher raw material costs.
Morgan Stanley released a report that says the surge in freight demand and shipper requests will continue through the end of 2021.
Truck and trailer OEMs are still heavily impacted by the semiconductor shortage gripping the industry with no sign of improvement through 2021, according to new data from > ABI Research
The shortage of semiconductor chips has been making news in the automotive industry for months, but it’s also having an impact on ag equipment.
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