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Recession forcing construction equipment dealers to restructure

Monday, August 17, 2009

Equipment dealers face restructuring during recession.
Equipment dealers face restructuring during recession.

The drop-off in sales of construction equipment due to the recession and the housing slump has forced some equipment dealers to restructure to stay in business.

In British Columbia, Canada, suppliers of equipment like dump trucks, excavators, bull dozers and loaders have seen their demand from the forestry, mining and construction industries fall dramatically.

"We constantly have to readjust, refocus and change our business plans due to the impact of the economy on equipment sales," said Blair Gourlay, operations manager with SMS Equipment, according to Constructionequipment.com.

One operator of a John Deere construction equipment dealership in Western Canada said sales are off by about 60 percent versus a year ago.

The same kind of adjustments and restructuring in the equipment dealership sector has been happening in the U.S. as well. Some smaller dealers could be forced to sell to larger dealerships or go out of business.

Last week, a major construction and agriculture equipment dealership in South Dakota bought out a farm equipment dealer in Britton, South Dakota. The dealership had generated about $1 million in its latest fiscal year, mostly focusing on parts and service for tractors.
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