Misterlift- excellent response. This would answer why Europe buys more forklifts than America. I can't think of any company I've dealt with that gets rid of equipment based just on the end of a lease. Very popular option here is the dollar buy out option, which means that at the end of a lease, you can purchase that piece of equipment for 1 dollar.

I do know that there are full service leases here but the few I've been around didn't seem to go well. For a fixed price per month the customers got new forklifts, any warranty issues & PM's included. All damages were billable. The forklift companies replaced anything with just the slightest show of wear/damage- tires w/outside scrub wear, seats with the beginnings of a tear, dented side panels, etc. The forklifts were like new at the end of the leases at the customers expense. The customers were extremely dissatisfied with the entire process- they even tried to break the lease early but couldn't without early termination penalties.

I'd be interested to hear what is covered for the weekly service fee on your side. Since damages are billable, how quick are the dealers to replace items with just the slightest show of wear? (Above I spoke of scrub wear on tires- in a 3 year period one set of forklifts got about 5 sets of tires based on scrub wear- the tread didn't even have a chance to wear). If most companies prescribe to the rent/lease montra, I would assume that -A) dealerships have many more techs than here & -B) there aren't to many small independent forklift repair companies.

The mechanism of all this is the lift truck supplier gets the sale (to a finance company - not the customer). The finance company collects the rental and the original equipment supplier conducts the service (for a fixed weekly rate - the risk lay with the supplier). The equipment supplier also takes the buy-back of the machine on completion of the lease and recycles the asset either by selling it or re-financing it over a secondary term.

As far as the customer is concerned he pays the combined lease and maintenance so, apart from fuel, tyres, driver and damages - he has fixed costs for 5 years - then replaces and the whole cylce repeats.

The fun really starts when suppliers give the customer the option to break the finance with a 'break clause' giving the customer the ability to have a new fleet earlier than he would have. Clearly this is high risk as assets are returned with a higher book value so it is usually the big boys who do this as they have more scope to place or sell the machines elsewhere.

This repeating cycle (and early repeating cycle) drives up volumes and keeps the lift truck factories full.

Yes basically from large fleets down to just one truck. What is interesting tho is that some companies will have on site engineers and as many service companies will admit it is quite competitive market with cost low. If you are a company who operate over 30 trucks ,you can benefit from lower cost's. I don't quite know the North American market and it might be that the managers there prefer the way it is.But with the global market they will be able to match the cost of there operation in Europe to the cost's in North America including down time and then go with the best option that suits there business

"What happens to all those used lifts in Europe?......
Posted by: bbforks "

We are trashing them!
In the last company where I worked we were tearing lifttrucks still operating perfectly because the market would not see them and then they were only required as a cost.

It would be interesting to see a cost comparison between a full lease w/service included & leasing with no service with the cost of a service dept included.

All compaines are in business to make the most money possible, I find it hard to believe that American companies haven't explored this option. I can only assume they have, and have concluded that having a no-service lease with an in-house service dept is more profitable in the long run.

It could be our tax structure, the rate billed for the full service leases, the downtime incurred while waiting for a tech from an outside source, liability issues, or anything else- it has to come down to a money issue somewhere.

What happens to all those used lifts in Europe? If they're buying new lifts at the rate of twice what we are there must be glutten of used trucks on the market- where do they all go? Do all businesses- large & small- subscribe to the lease w/service montra?

i think in Europe they seem to out source this side much more and in the UK certainly there is definitely more out side service than in house. By doing this customers are able to concentrate on there core business knowing that if a truck brakes down they can just call out a engineer. In ports and terminals this is a bit different where they do employ there own service engineers ,but for how long might be up for discussion as the benefits of not having the cost's of employment and parts stock and knowing that you can have on site engineers from the service company takes hold.

In Europe the contract hire market is quite developed and well run by both interdependent dealers and manufactures alike. I can see this move around the globe as manufactures and some companies like Briggs look to expand there business

So if I'm interpreting your blog correctly, the companies that lease tend to use the dealers or manufacturers techs for their forklift service.

In America, large companies employ their own service techs even if they lease the machine. The dealer only gets involved when warranty claims are needed.

This could explain why Europe buys more forklifts- In Europe, when the term of the lease runs out, they replace the entire package ( forklift & tech ). In America, when the lease ends, the company still has a tech force ready to repair the units they now own.

Its a bit of both the main manufacturers linde , toyota ,crown , Jungheinrich have there own service engineers in certain markets ,NACCO and others mainly Asian go through interdependent dealers. The leasing side is normally done as a separate contract
with the leasing company and the customer with the service side being looked after by the manufacture or dealer. Some leasing companies will have the name of the dealer or manufacture on the top of the rental agreement but at the bottom it will state that the agreement will be between the leasing company and the customer

Do companies in Europe employ their own fleet technicians or do they rely mostly on the technician that would be part of the leasing contract?

i think in the future North america will look to more of a rental market rather than buying.It gives the customer a much better service with out extra cost and he can see up front what the cost will be over the contract. Wants this happens i think the markets will close up in numbers. It is known that more larger trucks are sold in North america than Europe because of the lumber industry and heavy industry in the north american markets. Warehouse trucks and smaller forklifts do more in europe than north america because of one reason rental.


I think over the next 5 years majors changes will happen in both Europe and North America.These will be small markets to Asia this will be the main market in the globe with china leading followed by India and then countries like Thailand Malaysia ect

I would agree that it's a renting vs buying issue. I would guess that the American tax structure rewards buying & keeping a machine ( or maybe it's just an American thought) and the opposite would hold true for the Europeans- just my 2 cents.

Elephantroom:

I'm sorry,
it's my fault, I found the 2011 North America population figures at this site:
en.worldstat.info/North_America

Now I'm looking at:
en.wikipedia.org/wiki/World_population

and the problem that you was talking about is here again and,
much more big if it must be analyzed longitudinally (along the timeline).
I think I can't help you, but I will open another excel file and if a ratio appears interesting I will post it in your discussion.
I hope that someone else in this forum can help you.
Kind regards.

I do believe Davelift has a point regarding rental.

The machines are not purchased anymore in UK - they are rented. This means the average age of a lift truck being used is probably less than 5 years. How does that compare with the average age in America?

With the variables involved in rental being so variable, it is possible that you can replace a contract machine at less per week than you were paying for the previous five years despite machines actually being more expensive to buy!

it is possible this has less to do with populations and GDP, more to do with turning over or sweating of the asset?

Thanks Henrys.

I looked up the population figures in wikipedia (I'm sure there are better sources). Says 2011 population for Europe is 738mm compared to 528mm for North America - seems that population ratio is 1.4x. This is far smaller than the orders ratio of 2.2x. This is my question - why is there a difference in all aspects, population, gdp, growth rate? So far, there doesn't seem to be a clear answer. My original assumption was size of warehouses, particularly as Europe has more countries and may have more warehouses too - but it doesn't seem like anyone on this forum thinks that is an answer. I think the leasing vs. buying argument has some merit - perhaps it creates some excessive purchasing to oversupply a market need - but I don't think that can explain the sustained 20 years and even 50 year outpacing of Europe vs. N. America (as seen in the NACCO data).

Elephantroom:
before of all, thank you for the Nacco link,very useful,
then, I think is better to define exactly the variables we are analysing.
For example during 2011 the population in Europe was 711 millions of persons,but if you consider only the European Union,they are only 502 millions.
At the same time during 2011 the orders basis were 371771 in Europe and 169682 in North America.
Populations and orders have almost the same ratio of 2.2