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Crawler Mounted Hydraulic Excavator Auction Prices Lose Ground Against Resale Markets

Average prices in the resale market for Crawler Mounted Hydraulic Excavators increased over the last year, while the average auction prices for the same models decreased substantially in 2014.

Key Takeaways for Decision Makers
CONTRACTOR: When making a buying decision, it is important to watch the whole market’s movement rather than watching the trends of any particular manufacturer.

Digger. Mechanical Shovel. Trackhoe. Excavator. Regardless of what it’s called in your area or field, excavators (what we call them here at EquipmentIntel.com) are a crucial component of most construction projects. As such, we track an immense amount of data related to excavators on the resale and auction markets. This is Part 1 of a 2-part series highlighting some of the interesting trends in the market for crawler mounted hydraulic excavators in 2014.

Part 1 focuses on general market trends. Our market research shows that for crawler mounted hydraulic excavators, auction prices and resale prices in 2014 mirrored each other in the middle of the year and yet diverged sharply at each end of 2014.

Starting relatively close, auction prices for hydraulic excavators declined through January and February while resale prices inched upward. Both markets exhibited similar variations through the summer months, although auction prices took a steep dive in June 2014 relative to resale. That month, while the average hydraulic excavator held an asking price of over $103,000 in the resale market, auction prices dropped to just under $40,000 for these crawler mounted hydraulic excavators. Past June, price fluctuations in both markets mirrored each other until November, at which point the resale market price increased to $110,000 and the auction price dropped to about $47,000.

Often, these types of deviation can be explained by changes in the market share controlled by certain manufacturers. In 2014, the top manufacturers by the total number of models sold in the auction market were Caterpillar, Deere, Komatsu, Volvo, and Link-Belt, who together accounted for 85% of the models on the market. Similarly, Caterpillar, Deere, Komatsu, Case, and Volvo dominated the resale market in 2014, leaving only 17% of market share to other manufacturers.

Yet the price gap between auction and resale markets was not explained by any single company’s strategies. With 46% of the resale market in 2014 and 44% of the auction market, Caterpillar’s prices have a huge impact on average market value. Caterpillar’s resale prices rose from an average of $93,520 in January to $111,010 in December. Alternatively, in the auction markets, Caterpillar’s average monthly price dropped from around $69,000 in January to almost $47,000 by December. However, this was mirrored by the other manufacturers in the market for hydraulic excavators, in which auction and resale prices resembled Caterpillar’s declines and improvements. If the next year resembles the last, buyers and sellers of hydraulic excavators on the resale and auction markets may want to watch the whole market’s movement rather than watching the trends of any particular manufacturer.

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