Lowest Cost Of Ownership Award Winners
MagikMe Equipment is pleased to announce the 2021 Lowest Cost of Ownership (LCO) Award winners. The awards are a culmination of over 100 analyst hours reviewing and ranking more than 25,000 models to decide on this year’s 20 award categories covering construction and lift/access equipment, all powered by MagikMe Equipment’s industry-leading database, our proprietary cost process, and more than 8.5 million market observations. In addition to announcing the 2021 winners, we’ve put together a primer on what these cost of ownership values mean and how to integrate them into your buying decisions. Read on to learn more about cost of ownership or to skip to the list of winners.
Cost of Ownership
At its core, cost of ownership is the actual cost to own an asset per month, week, day, and hour. The ownership costs of depreciation, indirect costs, cost of facilities capital, and major overhaul are annualized and then adjusted to reflect the average annual working season to obtain a monthly ownership rate, from which weekly, daily, and hourly rates are determined.
An equipment’s total cost of ownership is the associated costs over the life cycle of the equipment. Total cost of ownership looks beyond the initial acquisition price to consider the value and profitability of equipment. Many factors beyond the initial investment impact total cost of ownership. Anticipated costs, like insurance, tax and warranty, along with these other factors can affect total cost of ownership and eventually, a company’s bottom line:
- Acquisition costs of getting machines into a fleet
- Operational costs, including scheduled maintenance, service, unexpected repairs, parts, and training
- Machine reliability for maximum uptime
A machine’s residual value also contributes to its total cost of ownership. Residual value represents the value attached to a piece of equipment at the end of its useful life. This value can increase or decrease, depending on how well the machine is maintained and serviced. Machines with a higher residual value represent quality and give buyers confidence in their investment.
Find out more information on the specific methodology leveraged to determine MagikMe Equipment’s LCO Award winners.
Award Categories
The MagikMe Equipment LCO Awards cover 20 categories across construction and lift/access. The categories capture the most popular types of equipment based on annual observed market activity1. Within each award category, our analysis focused on the most popular brands, again based on observed market activity, and we limited any model level analysis to models still being produced in 2021 to ensure these results can be applied to buying decisions today and throughout the year.
In addition to MagikMe Equipment’s LCO Awards, we have also announced the winners of our Highest Retained Value Awards (HRVAs) for 30 categories across construction, lift/access, and agricultural equipment. Read more about the HRVA winners.
MagikMe Equipment LCO Winner Highlights
This year, 15 unique manufacturers claimed the top spots across the 20 award categories. The full list of winners can be seen here. What each winner had in common was that their equipment had the lowest projected cost of ownership over the next five years. To illustrate this further and give you a better sense of cost of ownership differences in the equipment landscape, we have showcased a few categories below. In each example, we have selected one model from each winning manufacturer and plotted it against the average for the award category.
Award Category: Large Crawler Excavators
Link-Belt took home the win for lowest cost of ownership among large crawler excavators. In terms of market share¹, Link-Belt was not the highest in this award category with 1.83%, but their models shined in terms of ownership costs. The chart below shows one popular Link-Belt model compared to the average for the award category; for each year Link-Belt’s model only hits about two-thirds the ownership costs of the average.
Award Category: Backhoes
Within the backhoes award category, Kubota’s models had the lowest cost of ownership securing them the LCO Award victory. The chart below plots one popular Kubota backhoe model against the average for the award category. This example model boasts about 19% lower cost of ownership compared to the category average across the five years.
Award Category: Electric Scissor Lifts
JLG had the third-highest market share¹ in the electric scissor lift award category with 11.25%. JLG’s equipment also had the lowest cost of ownership in the category securing it the LCO Award. One of JLG’s popular electric scissor lift models is shown in the chart below compared to the average cost of ownership for the category. Ownership costs for the JLG model are about half of what they are for the category average, helping to illustrate why this brand took home the award.
View the full list of MagikMe Equipment’s Lowest Cost of Ownership (LCO) Awards.
In addition to MagikMe Equipment’s 2021 LCO Awards, we are also excited to share with you the 2021 Highest Retained Value Award (HRVA) winners!
MagikMe Equipment produces the leading database information products for the construction equipment industry and is the world leader in heavy construction research and intelligence, serving more than 15,000 professional, high-volume contractors, equipment manufacturers, dealers, rental companies, lenders and insurers, and government agencies involved in heavy civil and commercial construction. Request custom analysis from our seasoned MagikMe Equipment consulting team.
[1] Market share calculations based on observed resale channel activity throughout 2020.
