The original post, as I understood - asks the question why is MHE lower priced vs Ag or CE equipment. I suspect strongly, that the folks involved in Ag 7 CE equipment have similar discussions as came out in this thread - sales vs service vs total team, etc.
Price is an issue in the lift truck field as there is excessive production capacity at the known manufacturers level & constant presence of even lower priced products relatively unknown bands from China, Taiwan but unproven (longevity speaking) products, limited product support capabilities and a small but developing dealer network.

Years ago (mid '80's) I read an article about Caterpillar Construction Equipment who had about 45-50% market share was very concerned about this relatively unknown CE maker, "Mitsubishi" that came out of nowhere to a second place position in world with a market share of 8%. Previously. International Harvester was second place with about 3%, then died the death of a rag doll starting in 1981. They (Mits) came to the US with similar (almost identical to Cat) equipment as Cat but produced a higher quality/reliable machine & at a decided price advantage over Cat. At this time Mitsubishi was already making motor graders & small HP diesel engine for Cat. One might equate that to the Crown/Raymond battle for #1.

Henley Hawk, with regards to your post of verbal Diarrhea do you actually work in the forklift industry or are you just an outsider who thinks they know what actually happens at a lot of forklift companys. My 35 years of service in this industry tells me you are clueless as to workings of such companys and as to you post this is not worth web space on this site.

While I hate to see these discussions devolve into 'sales vs service. who is more important', let me say up front that NO ONE is more or less important.
People, almost as surly as electricity and hydraulic power, flow in the path of least resistance, for the greatest gain.
If the sales job was the more difficult job, then people would be moving out of sales and into the less difficult job that had the greater rewards.

For the sales folks that imagine the only way the product gets sold is through their efforts;
it's -ALL- sales, the service tech has to sell his self and what ever his diagnosis and recommendations of repair, just as surely as the capital goods sales person has to sell a complete forklift, and almost as often as there is a complete forklift sale, that sale starts with the service person convincing a customer that the most cost effective method of long term repair is replacement of a unit they already have.

For the service techs who think they are the only reason the customers pays his bill, if the customer had never heard of you and no one had vouched for your ability to fix their machine, you might have to find a different company to work for, or do something else (like doing sales) to get the word out.

It takes a team's worth of hats, to cover all the heads needed to get the job done.

Although, as we speak about the cost of forklifts, I think we should all lookup and consider the phrase "intrinsic value", which is the true reason for this industry: it is cheaper to do it with a forklift and people, than with people alone, what ever "it" [that requires a forklift] is.

Well, I do not have a fourty year background in this business. If I did so what, things change everyday and we must all adapt and overcome. There is no (I) in team. Only teamwork will when and lead the pack. Everyone else just follows or looks around with there mouth open.

I have been in this business for (12) years now and it still gets under my skin how some people under value sales people. I have had this conversation with several techs, who by the way could not even write out a complete sentence on paper, much less word a conversation with a business prefessional. Now, there are some good techs out there, some even go into sales and make it, some do not make it.

Yes, MH equipment is to cheap in my opinion.

First, let me say that most sales people I know in this business are all commission. Some do recieve a little salery of $24,000.00 per year plus commission (25% of GP.

For the ones who are on commission only its 40% GP.

Life of a salesmen or saleswomen, four to six appointments per day, 8-10 cold calls per day. Staying up after the kids go to bed to type quotes untill 1:00 am sometimes. Have weekly meetings hearing about marketshare. Typing up reports every week, sales quotes, call logs etc.

For the record, we try to make a decent margins when the market permits it. There is always a customer trying to get something for nothing.

Their is always a bottom feeder dealership who does not care about service or much less its employess who gives stuff away just to say ( I sold a forklift at cost) there are those bottom feeders who come up with these to good to be true deals and some customers fall for it. Its a tight market with tight margins. I can assure you the ones who are making it are working there tails off doing it.

So I would say to those of you with bad attitudes about sales people, GO OUT AND MAKE SOME COLD CALLS FOR A WEEK, FOLLOW UP WITH THOSE COLD CALLS WITH PHONE CALLS AND MAKE SOME APPOINTMENTS AND SEE WHAT ITS LIKE. Sell your dealership products, services, features and benifits. Go step into there shoes and see what its like.

Now, their are some bad sales people out there, they tend not to last long. Remember commission only.

I would like to see the techs go commission only. That would be great.

This is quite simple, ( to answer Snapman's original claim) if our sales guys and gals give the kit away sell for minimum margin or steal it and drop it in the users yard as a gift it keeps our dedicated, skilled and committed service teams busy - which means the business is earning and we all bat on tommorrow! I thought our service and sales and finance and HR and Admin were all in the same team in this industry? What is the definition of "too cheap" should we debate value, quality and innovation?

It really annoys me that the perception from engineers that sales sell machines cheaply and that the engineers are the ones that make the money for there employers. Forklift sales is a very competitive market and the cheapest forklift or company doesn't always win. The forklift industry and the directors in charge are to blame they set the targets and budgets. Without machine sales there would be no machines to repair, no jobs. I've worked on both sides of the fence and repairing machines is a lot easier than selling them. Barloworld pay there regional account managers around £24,000 a year + commission earning an average £150 per machine sale so there not earning the thousands of pounds engineers think they do. Sometimes the machines specification is wrong mistakes happen but the salesman still has to explain themselves they don't just walk away and leave it to service. If you think it's easy to sell mhe give it a go and you will soon realise that's it's not just the "engineers" that work hard and make profit for the companies.

this has has been a very good thread!!! lots of differing and even some similar opinions.
of course....mine.... is the only "correct" point of view but the posts are a very interesting read.
of course i'm kidding about...well... at least some of what i said.

Richard P, I think you have hit the nail on the head with the comment that we undervalue our industry. There have been some posts pointing the finger at sales but discounts are not my concern. The whole MHE product line and industry is undervalued by all.

interesting reading people and here is my view on it.
if you have developed a good working relationship with your client and your service dept have also helped look after them then selling the client another new unit is not that hard to do. people more often than not buy off people, I have changed brands twice and still my customers have purchased off me regardless of the brand. in regards to the difference between MHE gear and CE gear what people have to remember is that 90% of the time MHE gear is a non earning cost to a company instead of a constantly making money tool such as a piece of CE equipment. unless a company is charging to move a product with a forklift they wont make money from it where as a construction equipment company is charging for every min that there equipment is working hence why CE equipment is more expensive than MHE.
Just my input

John you (and most other sales people would) say; "All other functions of any company aren't required unless the products or services (not repair stuff) is/are sold".
BUT as a technician, and being a bit more exact in the phrasing, I would say "All other functions of any company aren't required unless the products or services have a clearly defined demand in the mind of the customer", if that demand exists, then the sale happens on it's own.
It is the 'clearly defined demand' that equals a sale, not the salesperson, whose job it should be to get the customer to clearly recognize that they have a demand for the goods or services offered by the salesperson.
This is a lot like "jobs" which are not created by investors or entrepreneurs, but by that same 'clearly defined demand'.

Andy. In response to your original question, yes I agree the lift truck customers do get exceptional value for money at the expense of the lift truck industry. But it hasn't always been that way, it is a consequence of total market saturation that has led us to a buyer's market.

If you look at the 1960s and early 1970's the 'big five', had the market divided nicely between them. Competition existed in a gentlemanly way and delivery could extend beyond 60 weeks for a standard 2 tonne machine. Mobile engineers and sales engineers were jobs that youngsters aspired to be and the customers simply had to pay the going rate.

Now we have massive globalisation with so many different manufacturers. Intermingled with the manufacturers we have the independents and then the local 'man and a van' - one look in the yellow pages will show how much choice the customer now has. Everyone is desperate for their slice - so they slash the price!

It is the variance on engineer's rates that gets me. How can a car mechanic in a car dealership workshop charge double that of a lift truck engineer who is running around in van?

We moan but we are still all here!

daniel q
I don't disagree with what you say, except for one thin, if you are a commissioned sales person paid on a percentage of the G.P. (after the service & parts department get their full margins on get ready costs) selling at little or no profit is not a good thing when it comes to paying the bills & taking care of the family. Yes, by salting the mine with more units does benefit the organization as a whole for an extended time period as the parts, service, rentals department the higher G.P. profit centers vs the sales dept. Yes, there are used sales that can help offset the low level of new equipment sales but in down economic times used sales slow down too.
I understand the concept of selling service agreements (and even receive a commission for each unit put on agreement) but getting an agreement for every truck sold is a challenge even in good times.

John r, yes MHE prices in the US are cheaper, but this is part of regional pricing strategies and goes for pretty much every product on the market...especially cars.

I don't think now is the time to judge pricing, and personally believe buying market share, by selling cheaply, is the right thing to do and it encourages businesses to buy now where possible. Also in doing so when the global market does pick up you'll have a good base of customers who are happy with your services, the machine and are in a position to buy, so you will be much better off than competitors.

Also if you sell a service contract with every machine the sale price of the machine matters not and you could even make a loss on the sale but would still be making a good profit overall.

Andy,

You really sparked a great conversation. I was really caught up in reading all these posts. I really can't begin to justify what has happened to our economy and the result on our industry. This is to say, Wow, what the heck happened.

We live here in Henderson Nevada right by Vegas. I personally see the situation of undervaluing the industry constantly. If somebody is not off-loading a massive amount of lifts on the market because of hard times then we have the usual suspects that will go out on his own and take customers from the company that he was working for and reduce the available resources for income.

The entrepreneaur(spelling) has always existed and I always like to see the owner/operator make it but, you just can't fit 10lbs in a 5 lb bag. Population moves toward a warmer climate but I am telling you, it is dirt and rocks. Thanks for the conversation.

Service, Sales, Parts departments will always feud with one another. It is always easy to blame a problem on another department. Durring slow economic times when customers will tend to throw money at junk trucks instead of purchasing new or newer trucks, it should be a joint effort between the service and sales department to help the customer. A new truck may not be justified but a used truck may be cheaper than repairing the old one. I have found 40 -50 even 60 year old trucks that customers think should be brought up to todays standards with only a few dollars spent. The truck is junk but when it is their junk it should last indefinetly. In my experience the customer will often listen to reason if the information is presented properly. Often the mechanic is the one who can explain the situation better than the salesman. I have used the line that "I will gladly fix your truck, but you have to realize that it is going to cost a small fortune. This is the problem and this is what is involved in repairing it. The labor and parts are more than the cost of a newer truck. I am sure we have something in our use truck lot that is in better shape than this. I can have the salesman stop by if you like." More than 50% of the time it works. When the junk truck is taken back to the shop. Do not clean and resell, or send it to a scrap yard. Someone will buy it and resell it. You may have to fix the junk again. Cut it up and send it to the scrap yard in unusable pieces.
When times are good the customers will remember the service they got from the service department when they were hurting, and they will gladly do business with the sales department. Any salesman will tell you that it is an easy repeat sale when the service dept has kept the customer happy for years. It is almost impossible to make a sale when the customer has had to call a compeditor in to maintain his trucks. Probably won't give the sales man the time of day. The sales man must sell the right truck to fit the aplication the customer has. Too many lite duty trucks (low $ cost )have been sold into heavy duty applicantions because the salesman only wants the sale. The service tech hears every time he is called in. "Whats wrong with this truck? It is always broken. Did we get a lemon or is
( brand x ) just junk?" It is hard to keep the customer happy when his truck is down as much as up. It doesn't matter whether the economy is up or down. The departments must work as a team. Regular meetings with all departments discussing meaningfull topics will help keep all employees working as a team. Keeping secrets between department will distroy a company too. I have worked for companies that seem to pit the departments against one another. In MHO that is the worst thing a co. can do. If you don't have a "TEAM" you won't be very sucessful for very long.
Think of the future when making a sale or repairing a truck. Will I keep this customer with what I did today or will he be thinking of calling the competition and I won't have work ( $ ) in the future.