Red Australia has not experienced a decline in Komatsu second-hand equipment sales due to the incentive scheme.

Australia's used forklift market is taking a beating with prices sagging as a result of excess stock.

Some blame the government's capital investment scheme, introduced in December 2008 (Forkliftaction.com News #399), which they say is luring traditional buyers of second-hand forklifts to purchase new equipment and benefit from the tax rebate.

"We have lost deals directly as a result of this scheme," says Cliff Chadwick, owner of Chadwick Forklifts which has been operating for the past five-and-a-half years.

He says used forklift dealers are getting hit four-ways: "Not only does the government subsidy work against us, but we're battling the global economic crisis, and on top of that, we've got big companies selling off their excess rental units which is flooding the market. And finally, there are a number of companies going broke which means their stock is ending up on the auction and depressing prices even more."

Chadwick says the price of trade-ins has diminished and it's tougher all round doing business.

But on a hopeful note, he says his company is surviving. "In the last month, things appear more buoyant - I think there's light at the end of the tunnel."

But while it's clear that prices for used equipment have softened, not everyone believes the government incentive is the real culprit.

Damien Garvey, national sales manager for NTP Forklifts Australia, which deals in both new and used equipment, tells Forkliftaction.com News that the used equipment market has been suffering over the past couple of years, and well before the government incentive was introduced.

"The main reason for this has been the factory-owned representatives in our industry are buying up marketshare, flooding the market with cheap new products and devaluing the used equipment market," he says.

NTP still accepts trade-ins but values have dropped, says Garvey, adding that the values of returned rental fleets have also decreased due to the flooding of new equipment.

He says that the continuous unreserved auctioning of these fleets shows that most companies are suffering the same effects.

And it's not just Australia's used forklift market that is depressed. Steve Mackay of Central Forklift Group in New Zealand tells Forkliftaction.com News that the New Zealand market is being impacted by the leading brand-holders dumping used equipment on the market at reduced prices as they struggle with the impact of the recession.

His company is still accepting trade-ins but at a reduced price compared to last year. The company is also carrying more stock as businesses are returning non-contracted equipment as a result of the recession.

Paul Bebendorf, part owner of RP Material Handling in Coffs Harbour, NSW, which sells both new and used forklifts, doesn't believe the government incentive scheme is having any real effect on the new or used markets.

"While traditional buyers of used equipment may decide to opt for a new Chinese forklift, it has more to do with price than the incentive."

He says the company still accepts trade-ins and does not believe that prices for used equipment have depressed significantly - "it really depends on the type of forklift being traded".

He says the company has been selling more of both new and used forklifts lately, perhaps a sign that the economy has started to recover.

Red Australia's Leonie Perry tells Forkliftaction.com News that the company has not experienced a decline in Komatsu second-hand equipment sales due to the incentive scheme. "Any downward movement, we believe, is due to the market in general rather than being a direct result of the government's tax break."

In favour of the incentive is Jenny Ritchie of Flexilift, exclusive distributor of Hyundai forklifts in Australia. She tells Forkliftaction.com News that the company's focus is on selling new forklifts and, as a result of the government incentive, business is pretty steady.

"It's good for the industry," she says, "but not for the used sector as it's just not viable to buy a second-hand unit when you can get a tax rebate on a new one."

She adds that the company still accepts trade-ins, most of which are sent off to auction. "Prices for trade-ins are much on par with the previous year," she says.

Not according to Peter Ewing, sales manager for material handling supplier Hastings Deering. "Prices have definitely dropped for used equipment. We are offering 25% to 35% less on trade-ins because otherwise we just can't sell it."

He says the company, which sells both new and used Caterpillar forklifts, has benefitted from the government's incentive scheme - "it's certainly helped and we have got sales directly as a result of it. Sales are still down on last year but we haven't lost marketshare."