Transportation
Last updated: April 2008

Industry Codes:
  • NAICS – 423830 Lift Trucks, Industrial, Merchant Wholesalers
  • SIC – 3537 Industrial Trucks and Tractors, Lift Trucks

Overview

Lift trucks are designed and built to support manufacturing, warehousing, shipping, logistics, construction, and other applications that require large loads be quickly and safely transported, stacked, and/or organized. To address these needs, lift trucks are built with a broad spectrum of sizes and capabilities and are equipped with specialized attachments that let them handle drums, rolls of paper, textiles, spools of wire or cable, pipes, and other specific loads. Original Equipment Manufacturer (OEM) asking prices for the "typical" lift truck have steadily increased to approximately $35,000 over the past 20 years. However, the selling price has remained almost level between $15,000 and $20,000 despite improvements in lift truck productivity, stability systems, and a host of other standard options. As a result, margins have been squeezed in the industry similar to the automotive industry. Shipments of material handling equipment seem to track GDP and Housing Starts fairly closely which explains why new orders and shipments are both trending downward. Shipments in 2008 are expected to be down substantially.

Industry Condition – Fair to Average


Key Industry Indicators

  • GDP
    In the first quarter of 2008, advance estimates showed the real gross domestic product increasing at an annual rate of 0.6%. This was consistent with increases seem in the fourth quarter of 2007.
  • Purchasing Managers' Index (PMI)
    In April, the Institute for Supply Management reported a PMI of 48.6%. The manufacturing sector failed to grow in April as the PMI fell below 50% for the third consecutive month.

New Equipment Demand

  • Most common – 5000 lb, Class IV, Cushion Tire
  • Average selling price across all classes of lift trucks is approximately $20,000

Secondary Market

Overview

Overall, the broad use of lift trucks creates a ready market for used equipment. During periods of economic downturn, it is common for users to retain older equipment longer than originally intended. This is good news for suppliers of repair and replacement parts since operating costs increase with utilization.

Although the quantity of lift trucks on the used market is increasing, this equipment represents a lower cost alternative to cash strapped businesses that cannot afford to purgeantares new. Therefore, despite the increasing supply of lift trucks, demand for well maintained equipment is expected to help slow the loss in value of used equipment. Specifically, lift trucks that are LP gas powered and diesel powered maintain a stronger resale value than electric lift trucks. With the price of lead continuing to increase, the cost of batteries has increased as much as 50%-60% over the last few years causing used electric lift truck values to decline. The high demand for pneumatic tire trucks has been and will continue to be the hottest commodity on the secondary lift truck market. When large quantities of material handling equipment must be offered for sale at the same time, discounts of as much as 50% can be expected.

Used Equipment Values – Fair to Average

  • Supply of used equipment – Increasing
  • Demand for used equipment – Increasing

Secondary Market Value Indicators

AccuVal Machinery Index Methodology
Trend Lines
Methodology of Statistical Analysis

In every industry segment measured by AccuVal, data regarding transactions of similar assets is collected on a global basis, organized by their key attributes, and analyzed to identify trends in the marketplace. These transactions are generated by tracking thousands of sales annually which generate hundreds of thousands of transactions. This information becomes part of the world's largest database of transaction information and is analyzed using a proprietary asset management platform called "Asset Intelligence."

To create the trend line, transactions are grouped by asset type. The sales are further consolidated within asset types based on the frequency of occurrence within a range of sales prices. This refined group of more homogenous sales determines the basket of transactions used to define market trends for a specific asset type. These sales are the most common assets in that category and are within the highest frequency of sales prices occurring in the asset class being studied.

These items are further studied and categorized based on their specific attributes. These attributes may include things such as age and other key factors impacting the specification of an asset such as the weight capacity of a lift truck or the tonnage of a stamping press.

These sales are then run through a regression model to normalize the sales price based on age and the other attributes considered in the data set. Regression analysis in its simplest form finds the best fit for the relationship of all of the variables considered. The standard errors of the regression coefficients are used to then normalize the sales prices and account for differences in the variables or specifications of each asset. The normalized sales prices occurring within each quarter are then converted to a quarterly index based on calendar quarters.

Once the normalized sales price is obtained for each calendar quarter, this information is plotted on a graph over time. A three-period moving average is computed from these data points to reduce the impact of variances in the basket of goods sold in each quarter.

Lastly, the data over the last four periods is further analyzed and used to plot the most current trend line. This analysis produces the estimates of the anticipated percentage of change in value for the asset category in the next two periods.




Factors Influencing Value & Marketability

  • Capacity, lift height, engine, fuel type, tire type, intended use
  • Age – 5 years or less is best
  • Condition and hours of operation

Industry Experience

Valuation Monitor

AccuVal routinely provides appraisal, consulting, and asset management services to companies using a broad array of Material Handling equipment. View industries serviced >>

Representative Clients Our Associates Have Served

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Success Stories

  • AccuVal has Appraised the Entire Range of Lifts Trucks in Over 100 Industry Segments
  • Aided Manufacturers with Asset Optimization Strategies That Included Schedules for Lift Truck Replacement to Maximize Return on Investment
  • Disposition of Lift Trucks Surplus to the Needs of Corporations
  • View all Success Stories