German re-engineering
June 1st 2009 Jungheinrich is gearing up for used equipment sales growth. Re-engineered in Germany, the firm challenges users to spot the difference – and thinks this summer's online auction should prove interesting. Brendan Coyne report
Normally the problem with buying second hand equipment is that you can't be sure it has been looked after; the the 'one old lady owner' fib finds you out on the hard shoulder. But Jungheinrich claims its used equipment, remade in house, is uniform in quality across Europe – and prices are under two thirds that of a new model.
Although used equipment doesn't command the residual values of a new truck, the trend for shorter contracts, with added value trimmings and swifter RoI periods, can obscure longer-term planning. Perhaps unsurprisingly then, Jungheinrich reports 50 per cent used equipment growth over the last four years, according to Henning Walter, head of the used equipment operation in Dresden.
Returning from contracts across Europe, the trucks are assessed, dismantled and rebuilt to rigorous quality standards. While some are damaged beyond the point of economical repair, the majority are washed, disassembled and then rebuilt by a single engineer, with a second engineer checking his work. All worn parts, says the firm, are replaced or repaired where necessary. For electric trucks Jungheinrich has a deal with Exide to regenerate batteries, which are then guaranteed for up to two years.
The attention to detail, Walter predicts, will see used equipment account for 30 per cent of the company's global business by 2013. Signalling this intent, the Dresden plant has recently been doubled in capacity.
From Dresden, the trucks can be supplied anywhere in Europe within four days – central storage and distribution, says Walter, is more economically viable than disparate stock in different countries. It also means seasonal peaks across Europe are more easily managed.
Walter also says the contractual-status information provided by Jungheinrich's SAP system means trucks can be swiftly moved to regions where contracts are due to end. The firm's sales staff then approach those customers with either new or used equipment. "Because the same sales manager looks after each territory, there is no bias towards new or used – the customer decides which solution fits best," he says.
In the UK, Neil Warren, head of used equipment and short-term rentals, says customers are increasingly open minded about their fleets: "Mixed [new and used truck] deals are on the up," he says. "We sell solutions – and used equipment, particularly the Ready to Go range, which delivers the same operating costs as new trucks, is becoming a bigger part."
Making up around 20 per cent of the firm's UK sales last year, Warren hopes used equipment will account for around a quarter of Jungheinrich UK truck sales in the current year. He says the firm's seven new used equipment centres – located alongside its existing facilities at Warrington, Sheffield, Birmingham, Milton Keynes, Bristol, Llanelli and Cumbernauld – should help achieve the increase. Not to mention the July auction, which sees 250 units go under the hammer.
Given Jungheinrich has over 30,000 trucks returning from contracts every year, the firm is confident it has most needs covered: "If we can't find the truck you want it probably doesn't exist," says Warren. While probably not driven by one old lady, all are rebuilt by one experienced engineer to a uniform high standard. And much like Dresden, it's hard to tell the old from the new. More articles from Chemstore Engineering: | 
