Both dealers and large fleet owners understand well that no machine lasts forever. Wear and tear take a toll on heavy equipment, and as time goes on and usage hours add up, the need – and cost – for repairs increases, eventually leading to the decision to replace equipment. But what that cycle looks like in practice can vary wildly.
We spoke recently with Adam Donner, regional sales manager for SANY, and Angus Davis, owner and CEO of Texas State Rentals, to get some insights for how dealerships and equipment owners can monitor their machines and maintain their fleets to be ready for any job.
Lifecycle for Fleet Vehicles
The lifecycle for any given machine depends a lot on what the equipment is and how frequently it’s used. Even so, there are some trends and general rules that can help dealers and fleet owners stay ahead of any major issues.
Davis said that in his experience, mini excavators and similar small equipment usually has a lifespan of about three years in his rental fleet. That’s the range where machines still have a low total number of usage hours and overall cost of ownership. Bigger equipment like large excavators, however, is harder to gauge so broadly, as some machines can last for years with low usage and proper maintenance while others are workhorses that wear out far more rapidly.
Dealers like Davis’ typically have a higher rate of equipment turnover in general as machines are put into rental service and eventually purchased. Fleet owners, on the other hand, typically purchase equipment with the intention of running it for several years before trading in, reselling or scrapping their machines. The approach that’s best will depend on the individual owner and their own approach to fleet planning.
Developing a Fleet Plan
For his dealerships, Davis likes having a range of different equipment options for his customers to choose from. His locations offer a mix of new equipment with low hours and the latest features to older, more well-used machines that offer a lower rental and purchase price.
“Having a good mix – being able to have something new versus something lightly used or heavily used – gives the dealership many options for equipment and a variety of units available to a customer,” said Donner. “It means a buyer can buy used or buy new.”
“It also lets [a fleet manager] develop their own business plan,” added Davis. “Do you want to be buying a 6,000-hour unit or selling a 6,000-hour unit? That depends on their business plan and usage needs.”
Fleet owners that have the capacity to make their own repairs and manage their own maintenance are more likely to opt for older or higher-hour equipment. This is also true for those in the market for more specialized machines that are used infrequently and have lower overall usage demands. Other owners prefer to purchase newer equipment as maintenance costs and warranty coverage can often be included in a single finance payment. This means there is a reduced risk of unplanned costs and a consistent payment that can be budgeted around. As this equipment ages, it can also be resold or traded in toward new machinery, providing residual value for reinvestment.
Constantly Revolving Machines
For Davis, having a constant rotation of machine inventory of varying ages and conditions isn’t just a byproduct of doing business – it’s the plan for his operations. Typically, he says, he has some new machines with only a few months in the field, another selection of machines that are moderately used – those with a year or two of usage and still under warranty – and older machines with higher hours for the well-used buyer demographic. However, with SANY equipment growing in popularity among his customers, he’s had a hard time keeping up.
“We keep upgrading our fleet, and whenever someone rents a SANY and sees that it’s something running top notch, they look to add it permanently to their fleet,” said Davis. “SANY is fulfilling at a higher rate than previous years. The five-year, 5,000-hour warranty is giving [SANY] advantages in the current market conditions and giving customers a reliable machine that people can count on. Economic times are uncertain, but not these machines.”
“Having a good mix – being able to offer something new, something lightly used or something thoroughly used gives a dealership many options for equipment – and a variety of available units for a customer,” added Donner.
Davis also noted that he’s beginning to see rentals pick up right now, which is typical for October at his dealerships. This gives buyers a chance to see equipment on their job sites and determine if the machine is something they want to buy ahead of the last five weeks of the year – his busiest time for sales, as fleet buyers look to close out equipment budgets and cash in on end-of-year tax incentives. He expects that by the close of the year, he will completely clear out of all 2017 and earlier model year inventory in his current fleet across all six of his locations.
Considering the Cost of Ownership
Another factor that weighs on the minds of many fleet managers and dealers is overall cost. Davis said this was one of the factor that he saw driving more and more of his customers from competitive brands to SANY. He mentioned a long-time customer who owns a fleet of more than 100 mini to large excavators from a competitor’s brand who recently bought his first two SANY machines based on his experience renting from Texas State Rentals and the lower overall cost of ownership – something Davis said is becoming increasingly common.
“More and more people are converting to SANY because they’ve rented, seen them prove their worth, and now are looking to buy,” said Davis. “SANY offers a lower acquisition cost, more uptime and a lower cost after the sale.”
SANY’s commitment to delivering More than Machines has also been a benefit, said Davis. He mentioned that SANY’s warranty, response time on getting support, when needed, and availability to answer questions or provide assistance – both to him as a dealer and for owners – have been other factors driving interest and investment from customers.
“Other manufacturers may have a warranty, but it takes weeks for a fix and I’ve seen owners go buy parts on their own because it’s faster. They offer a warranty [customers] can’t count on,” said Davis. “SANY is there to deliver and stands behind the equipment with the ability to provide parts and repairs quickly.”
Reliability, Resale and ROI
In addition to the warranty protection and available financing of maintenance service in purchase contracts, Davis noted that the Tier 4 engine requirements have also created a more level playing field among manufacturers. Overall, the new engine designs have limited the resale market for used machines outside of the U.S., and Davis said this has helped brands like SANY really stand out.
He also sees the SANY brand growing in popularity among his peers in the industry as an active member of the Texas Rental Association.
“It’s about ROI. It’s about loyalty to your bottom line. It’s about reliability,” said Davis. “If you’re buying a brand just because you like the brand name, you’re not in the rental business.”
SANY’s competitively priced and reliable machines, the availability of low- or no-interest financing through SANY Capital, and equipment that’s backed by an industry-leading warranty are all factors that help keep the overall cost of ownership down. As a result, Davis has seen more and more fleet owners make a switch. And, as concerns of a turbulent economy continue, Davis says that many of his renters and buyers are looking for something they can count on.
“I may sell more SANYs next year than this year as more people discover that it’s a good price and a proven product,” said Davis. “With fixed costs over the next five years, people can make business plans around it. We’re selling into an unsure economy, but these machines are something you can be sure about.”
Find Rentals, Support and More at Your Local Dealer
With dozens of dealers like Texas State Rentals located across the U.S. and Canada, you’re never far from a local SANY dealer. Your local dealer can help you find equipment that meets your needs or provide warranty service, routine maintenance or technical support for your equipment. See why SANY delivers More than Machines today. Find a dealer online or call SANY at 470.552.SANY (7269) today.