Study Researches the Effect of Tier 4 Emissions on Used Equipment Prices

Manfredi & Associates, Mundelein, Ill., announces a multi-client study, titled “Quarantined Markets? The Possible Isolating Impact of U.S. Emission Regulations on Used Construction Equipment Sales and Pricing.”

There are some industry observers who believe that when today’s new machines equipped with engines modified to meet the increasingly strict government regulations are sold as used machines in three to five years, their prices will decline more than normal. The machines sold in the U.S., Europe and Japan, equipped to meet the higher standards, will be significantly higher in price than the models they replace and may not be saleable in markets where specially formulated low-sulphur fuel is not available. The used equipment market may become divided into silos of demand with few transactions outside each specific emission regulation area.

The study is designed to answer these questions.

• Will Tier IV equipment be saleable outside Tier IV markets?
• How will equipment users respond to the increased cost of purchasing and operating Tier IV machines?
• What will be the impact of Tier IV machines on used equipment sales?
• What will be the impact of Tier IV machines on the U.S. and Canadian rental markets?
• What will be the impact of Tier IV machines on the worldwide auction market?
• Will Tier IV emission devices be disabled or modified on machines sold outside Tier IV markets?
• Will Tier IV emission devices be disabled or modified on machines sold outside Tier IV markets?
• What will be the impact on new and old equipment residual values?
• Is the low sulphur fuel required for Tier IV machines expected to be available in emerging markets?
• What effect did Tier IV have on the on-highway truck market and how does that correlate to the construction equipment market?

Primary sources of information will be manufacturers, equipment users, equipment distributors, finance and lease companies, and aftermarket kit suppliers. The complete study is expected to be released between July 1 and August 30, 2012. Charter subscriptions for this study are available for $15,000 until March 30, 2012, after which the subscription fee is $20,000.

The authors of the report are Frank Manfredi of Manfredi & Associates, and Tom Rhein of Rhein & Associates. Manfredi & Associates publishes Machinery Outlook and Machinery Outlook Europe. Prior to forming Manfredi & Associates in 1984, Mr. Manfredi was responsible for the direction of construction equipment research in the Machinery Services Group at Nielsen/Dataquest for eight years.

Rhein has been in market planning, research, product development ,and business planning activities for more than 35 years. His experience includes being divisional manager of market planning and research for Detroit Diesel Allison and manager of product research and competitive analysis for General Motors.