extremely broad, both in terms of physical specifications and in
terms of pricing, from €200 hand-operated pallet trucks to dock
equipment and container handling equipment with a capital cost in
excess of €100,000.
goods, there is a need for materials handling equipment of a
specific application. Such a demand for relatively high-cost
specialised equipment makes this market prime territory for cost
management through contract hire and leasing.
The UK’s forklift truck contract hire/lease market forms 60
percent of the MH’s €440 million business. This might not last
though. While more than 27,000 forklift units were sold in the UK
during 2008, this number is expected to drop by as much as 30
percent in 2009 as a consequence of the economic climate.
The forklift market has two major divisions. The first –
counterbalanced units – contains assets used for both external and
internal loading, with a range of units powered by either electric,
gas or diesel power systems.
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The other division, comprising reach units and order pickers,
tends towards electric powered machines used for stacking and
retrieval functions in warehousing.
Manufacturers include Toyota (which is aiming for a majority
share of the forklift market worldwide), the German-owned Linde,
Crown, Doosan, Hyster, Jungheinrich, Komatsu, Mitsubishi and
Nissan.
Whereas many of these manufacturers have their own captive
finance houses and joint ventures, finance for the MH sector is
provided by specialist divisions of several international lessors.
The UK market is topped by BNP Paribas Lease Group subsidiary
Albury Asset Rentals, while other notable players include De Lage
Landen, GE Capital and HSBC Equipment Finance.
Due to the durable nature of MH assets, roughly 60 to 70 percent
of leases tend to be structured as five-year agreements, rather
than the three-year terms prevalent in the motor and LCV
sectors.
The biggest market for MH leasing is in the UK. There has also
been a large market for second-hand equipment resale in the CEE
countries, although this appears to have shrunk significantly in
2008 as EU economies have slowed.
Historically, the secondary market in the UK has suffered as a
long-term result of high residual values written into leases in the
1980s. Now most RVs are set at a very conservative level.
In terms of new unit values, MH assets have seen pricing
increases over the past two years linked to commodity price
increases, although this has been offset to some extent by
industry-wide discounting in the core market, which can approach 50
percent.
Despite difficulties with resale and industrial slowdown,
however, the MH leasing market looks to remain healthy within
reason for 2009, due to the range and number of businesses
requiring some form of materials handling and looking for ways to
manage cashflow.
Fred Crawley
