First publishedin World Highways
ECED's first Dealers' Conference in April during Intermat resulted in "a tremendous success and solid future outlook for the association"
The president of the European Confederation of Equipment Distributors
(ECED), Dr. José Gameiro, said the gravity of the current crisis is "the worst in the past 50 years, with a devastating effect on equipment distribution for public works and civil construction."
Describing the foreseeable consequences for the equipment sector, he estimated that "up to 20-30% of European and American brands risk being absorbed or united with another brand, or will simply disappear."
This in turn will lead to the disappearance of hundreds of distributors across Europe, while Chinese manufacturers will continue their entry into the European market.
Dr. Gameiro was speaking at the successful first Dealers' Conference, which ECED set up in partnership with the organisers of the Intermat
show in Paris, where he outlined how ECED members and the construction machinery sector should react to the situation. He believes that dealers and manufacturers need to improve their relationships, and in doing so consolidate their investment efforts in stimulating the launch of cheaper, greener and more productive machines, according to the client's wishes. European distributors need to associate themselves, and even merge when appropriate, in order to modernise their operations, reduce distribution costs and improve their profit margins so as to attract more outside investors.
There is also a need for simpler contracts to regulate the relationship between manufacturers and distributors in order to ensure equality in the rights and obligations of both contracting parties. This should allow for a stronger and more loyal distribution network and better performance of the equipment sold.
He welcomed the senior representative of the European Commission
to provide distributors with a much-needed understanding of European Competition Law, and how the current and future EC Vertical Agreements Block Exemption Regulations provide a certain amount of legal protection for the distributors.
Representing the French member-association DLR, ECED Vice-President Philippe Papin welcomed over 80 participants to the meeting and Intermat, and stressed that it should be each national association's duty to play an active role in supporting their European umbrella association, ECED, to ensure that the distributors' voices are heard by all EU
BNP Paribas Leasing Group outlined the importance and different ways of funding construction equipment purchases during the crisis, followed by a detailed insight into the US Economic Stimulus Plan (and how this will affect the construction sector) by Toby Mack, President and CEO of the Associated Equipment Distributors (AED), the American counterpart of the ECED.
He stressed the need for an equally strong European association, and welcomed the opportunity to cooperate more closely with ECED in the future, an initiative that started when the ECED President and Secretary General were invited to attend the AED's 2009 annual meeting in January.
David Phillips from Off-Highway Research
presented the global challenges for the construction equipment industry, and said he believed that dealers should be considered by the manufacturers as an extension of their marketing and sales department: such a change in mindset should ensure the positive relationship between both actors.
Gérard Déprez, President of ERA (the European Rental Association), confirmed the need for better relations between all actors in the equipment sector, and pointed to the excellent relationship between the ERA and ECED as serving as an example to their respective members.
Predicting a decline of 10-30% in turnover for rental companies in 2009, he welcomed the initiative by the ECED President to discuss a general agreement on the maintenance of rental equipment by the dealers and their mechanics.
Paolo Cesarini, Head of Unit at the Directorate General for Competition of the European Commission, gave an overview of the Commission's vision on distribution agreements and competition law.
Machinery auction houses, Ritchie Bros
, confirmed their willingness to work together with ECED and its members on the crucial issues of non-compliant as well as stolen machines, and the need to tackle both at European level.
ECED's Secretary General Tom Antonissen also outlined some of ECED's recent actions in Brussels, stressing that the continuous support of the national associations and corporate members of ECED, as well as further cooperation with other European associations, is instrumental for improving the current difficult situation in which most dealers find themselves.
Dr. Gameiro highlighted the need to continue to make ECED bigger and stronger, and promised this would be reflected in an even larger conference next year, likely to be held in conjunction with Bauma
2010 in Munich, Germany.