Since the beginning of the year, however, the mammoths on wheels have started to budge again.
The rises announced for 2011 vary between 40% and 60%, with estimates for this sector ranging between a “slight recovery” and “this will be the best year in our history.”
However, major infrastructure projects are progressing very
slowly, while some of the EU funds for development and
competitiveness end up in the hands of builders that do not know
exactly what to buy.
“Mammoths” on the sales lists of major distributors still have a
hard time finding a buyer in the absence of significant
infrastructure projects. When needed, the necessary equipment is
supplied by rental companies.
The turnovers of the top five heavy-duty equipment companies in Romania exceeded the RON1 billion mark in 2008, but the following year they plunged 70%.
The past two years have seen changes both in the equipment used and in terms of client behavior. Whereas in 2008 the shopping list mainly included items for residential and office projects, when the influence of the real estate boom was still felt, in 2011 client attention moved towards equipment used in infrastructure projects.
As far as equipment is concerned, major dealers on the market seem to agree that the trend is towards more sophisticated technology, which allows cheaper maintenance in the long run.
“The crisis has taught us to use higher performance equipment,” said Constantin Marcu, general manager of distributor Marcom, one of the largest heavy equipment sellers in Romania.
The owner of the business said the company ended 2010 with a turnover close to the RON100 million recorded in 2009, “slightly down”, and added that prospects are optimistic for 2011.
“Clients are now more inclined to buy quality. It’s true that quality can cost slightly more than the market average, but the difference is below 10%, and is recovered within two years, or even within the first few months of operating the equipment,” said Marcu.
Marcom saw sales up 40% in the first four months compared with the first four months of 2010. The full-year increase may be even higher.
Leasing and bank loans remain an important source of funding, but in the last few months the share of EU funding has increased.
“In 2008 people would come to me and tell me exactly what equipment they needed for their works. Now they say they have secured EU funds and want some equipment, but are not sure what,” said Constantin Mincu, manager of Case Utilaje, a medium-sized company, which targets EUR12 million in turnover this year, a 50% increase on last year.
“People prefer to buy several small pieces of equipment for EUR200-250,000 than one with a high capacity,” says the businessman who adds that 80% of the equipment he has sold this year was paid for with EU money.
Liebherr, one of the largest suppliers of cranes in Romania, projects a 60% turnover increase this year, from the EUR14 million it had last year.
(EUR1=RON4.2160)