Key Takeaways for Decision Makers
RENTER/SELLER: If looking to secure the highest premium on the resale market, consider going with JCB or Caterpillar. Be aware, though, that you would not get the same high brand premium from an older JCB machine as you would with an older Caterpillar machine.
FINANCE: The best brands to finance are the ones that have the longest useful life and garner the highest premiums, such as Caterpillar or Bobcat.
EQUIPMENT MANAGER: Owners of Deere or Terex skid steer loaders might be better off holding onto them and seeing if they can rebound, while someone looking to purchase a skid steer loader should look into buying these brands due to their low premiums.
How important is a brand name in the skid steer loader market? Thousands of dollars in advertising, marketing, and brand awareness are spent each year by major OEMs in this space, and they’re mostly geared towards the sale of new equipment. On the secondary market, the impact of the manufacturer on the fair market value can be harder to determine. At EquipmentWatch, we have developed a metric, known as the brand premium, to better understand this topic.
In this article, our brand premiums are based off the past 13 months of average asking prices on the resale channel for skid steer loaders within each brand. Average asking prices across all ten brands are used as our baseline. The graphs within this article were created by isolating the impact of brand name by holding remaining factors such as region and age constant across more than 220,000 skid steer loader observations. The brand premium is the variance percentage from the average asking price for all skid steer loader brands in our market data. We chose these ten brands because they make up over 98% of the used market for skid steer loaders. Brand premiums are important to understand because they provide insight as to which brands have the highest perceived value.
As can be seen in the first brand premium graph, JCB had the highest brand premium in March, with Caterpillar in a close second. We can see that Caterpillar had almost the same brand premium as JCB in January, but Caterpillar has not yet been able to top JCB. Three of the five brands had an overall increase in brand premium over the past 13 months. Caterpillar increased from 6.2% to 8.3%, Case increased from -0.9% to 1.0%, and Gehl had the largest increase, going from -6.9% to -0.6% over the past 13 months.
Looking at the second brand premium graph, we see that none of these five brands have a premium higher than the average as of March, with Mustang having the highest of the brand premiums at -1.1%. The largest decrease was in Terex, going from -4.9% to -9.1% below the average. The lowest brand premium of any brand, as of March, was found in Deere, which was about -9.8% below the average. Mustang and New Holland were the only two brands in this graph that had an overall increase in brand premiums over the past 13 months, while Volvo went up and then back to its starting position.
In terms of popularity among the twelve brands, Bobcat is the most popular with almost 28% of the overall market share, while Caterpillar and Deere round out the top three. The rest of the ten brands, in order of popularity, are: New Holland, Case, Gehl, JCB, Mustang, Volvo, and Terex. In terms of average prices, JCB had by far the highest average asking price, with Caterpillar and Volvo being the second and third highest.
Due to the high popularity of these pieces of equipment, the rated operating capacity of skid steer loaders has kept growing in recent years. The largest skid steer now has a capacity of 4,200 pounds. You compare this to a few years ago, when the largest skid steer had about a 3,000 pounds capacity. These machines are now used for a myriad of different jobs, whether it be building or maintaining highways, demolition, or using them on your farm for handling bales of hay or as a replace for a tractor. Gehl and Mustang, who are both part of the Manitou Group, just unveiled these large skid steers at ConExpo in March. We can expect the brand premiums for the manufacturers who are releasing these larger skid steer loaders to increase over the next couple years.
Average age is important to understand because it details which brands are staying on the market the longest. When looking at the first age graph (above), we can see that there are three brands lumped tightly together with the highest age, Caterpillar, Bobcat, and Case in that order, have the highest average ages of the five brands. JCB has the lowest average age of any of the five brands, averaging about 3.61 years old as of March. This very low age could be the reason why JCB has the highest brand premium. All five brands have seen an increase in average age over the past 13 months, with Caterpillar having the largest increase of the five at just less than one year.
In the second age graph, we see that Terex has the lowest average age of any brand, averaging 4.42 years. Deere has the highest average age of any brand, with an average age of 9.95 years. The largest increase in average age was in Terex, going from 3.4 to 4.42 years. By using the content in this article, an equipment owner or buyer can determine which brands can bring the highest premium when selling or be acquired at the lowest premium.