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Home / ANALYSIS / Getting flexible: Finance and rent models are influencing the Gulf’s excavator purchases

Getting flexible: Finance and rent models are influencing the Gulf’s excavator purchases

by John Bambridge on Nov 7, 2017


The 20-tonne CX210B is the best-selling model for Case Construction Equipment in the Middle East region.
The 20-tonne CX210B is the best-selling model for Case Construction Equipment in the Middle East region.

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Piet Van Bakergem, GM at Hitachi Construction Machinery Middle East, which is noticeably in the process of expanding its service network in the region, meanwhile notes: “We have several warranty programmes up and running and available; on top of that, we can offer on demand and customised requests. With some markets very much in a state of uncertainty under the influence of the oil price and other situations, there is a growing interest for rental options among some end users.”

Liugong’s Zhu, adds that market conditions are elevating credit support and finance options to become almost as important a factor in purchasing decisions as the provision of aftersales support.

He details: “Financial support has become much more important since the oil price dropped. More and more key customers are looking for both comprehensive warranties and financial support.

“Some of our key accounts in Morocco will ask not only for the standard warranty, but for the manufacture and distributor to keep track and take care of their machines all the time, and solve all the problem to confirm the working time and productivity.”

In a final market trend, Ilkay Fidan, business director for Middle East and Africa within Volvo CE Sales Region EMEA, notes: “There is an interesting trend regarding fuel prices in the Middle East. Lots of subsidies have been lifted and fuel prices have increased in most of the Gulf countries — and that has been making investors think about lower fuel consumption machines.

“We are expecting the trend will be more towards lower total cost of ownership — and Volvo CE excavators are among the most fuel efficient on the market.”

With regards to the rental segment, he adds: “Rental solutions will be more important and this will lead distribution channels to be more pro-active in proposing different alternatives to end user.

“We expect the 20-tonne class will continue to dominate rental, but customers will increasingly look to the segment for other class machines. The main shift in some countries will be to have the right machine for the right application.”

He continues: “The key buying criteria are shifting. Brand used to be the most dominant criterion but now we have seen the trend going for low operating cost machines with proper dealer support, as well as the increasing popularity of rental options. 

“In other market, bundling offers with the machine, extended warranties, service solutions with connectivity and finance are the major trends. The dealers have to be capable of offering different solutions for their different customers’ needs.”

Volvo CE is also hoping to drive the sales of its wheeled excavators in the Middle East, as Fidan adds: “We have not seen any drop in the market for these machines, which are extremely attractive for city jobs. There is definitely significant opportunity for them.”

In response to this trend, Caterpillar has also rolled out two wheeled excavators — M315D2 and M317D2 — with the express intention of targeting Middle East markets, and the pitch highlighting their versatile front-linkage and work-tool capabilities.



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