A white paper released by DLL suggests that remanufactured pre-owned equipment product lines can boost lessor profitability.
DLL researched external communications of over 218 manufacturers across the construction, transportation, industrial, food and agriculture industries and found an increasing number of manufacturers see the business benefits of being actively engaged in second life assets.
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However, the report highlights that less than 1% of them has a remanufacturing program.
The paper by the Dutch lessor challenges manufacturer anxiety over impacting new equipment sales by reusing second-hand assets and highlight its strategic benefits.
"The current paradigm is that offering re-manufactured or refurbished assets and services negatively impact new asset sales. This phenomenon is more known as cannibalization. It refers to customers obtaining second life assets while they have had the required budgets to acquire new," wrote the report.
DLL researched best practices of its partners that are engaged in second life business and found none of these manufacturers reported any explicit negative impact on their new asset sales.
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By GlobalDataRob van den Heuvel, senior vice president global asset management at DLL said: "The linear economy is not sustainable. There is an environmental and commercial need to embrace new, circular business models. We’re looking for innovations to reduce the pressure on the planet’s finite resources and simultaneously stimulate entrepreneurship and business success. Second life business appears to benefit finance, competitiveness and the customer, so a win-win solution."
