I just noticed that business is so bad that Cat has now entered the Auction Business. Just think this is no small step for the giant heavy equipment builder. I guess they just can't sell it so why give RB or some other auction co. a % of selling price. Did this just start I saw it in 7/31/09 hot line. This is change!
Just speculation on my part, but this may be an indication that things are still tough in the industry. It's possible that Cat has inventory that's still not moving at this point. What does that mean? Layoffs, because there's no room for more machines. Maybe Cat is just simply trying to survive with minimal layoffs. Sell inventory at auction, empty the inventory lot, and avoid layoffs as much as possible. No...not a long term strategy, more trying to hang on on their part until things pick up. And I sure wish they would.
I think they did the first one in February or maybe January. From info I got from friends there were reserves of everything but I don't know that for a fact. I don't know why they didn't do something like that a long time ago. I guess its because they don't like selling unreserved. The other issue is they probably own the equipment. It's not like Ritchie Bros. who don't have their own money on the line on most of what they sell. They just collect a commission and move to the next piece.
All... I can shed some light on this... it's not exactly that Cat entered the auction business. A number of mid-western dealers started a joint venture with Cat's blessing... it's called Auction Services and they are working with Cat to advertise. Right now they mainly work with dealers and their customers (the rumor is some big site contractor was folding up and was gonna force their dealer to get them out of the equipment). Anyway they have had a couple of auctions... they have people from Cat Financial there and they offer some incentives... results seem mixed. Most east coast and west coast dealers are not actively participating as there are established Ritchie sites and sales.