ECED First Dealers’ Conference on 20 April during INTERMAT

Brussels, 25 April 2009

The widely announced First Dealers’ Conference, which ECED decided to set up in partnership with the organisers of INTERMAT – one of the largest international trade shows for the construction industry – amounted to a great success, even in these current times of economic decline and reduced construction activity all over Europe and beyond.

Opening the full-day conference, ECED President Dr. José Gameiro stressed the gravity of the current crisis as being “the worst crisis in the past 50 years, with a devastating effect on equipment distribution for public works and civil construction”. When describing the foreseeable consequences for the equipment sector, Dr. José Gameiro estimated that “up to 20-30% of European and American brands risk to be 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.

ECED President Dr. José Gameiro during his opening speech at the ECED First Dealers’ Conference.

Outlining how ECED members and the construction machinery sector as a whole should react to this situation, Dr. José Gameiro stressed his belief that dealers and manufacturers need to improve their relationships, and in doing so consolidate their investments efforts in stimulating the launch of cheaper, greener and more productive machines, according to the client’s wishes. Furthermore, 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.

Last but certainly not least, the ECED President was adamant about the necessity 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, which should allow for a stronger and more loyal distribution network and better performance of the equipment sold. In this regard, Dr. José Gameiro especially welcomed the senior representative of the European Commission to the ECED conference, since one of the main features of the gathering was to provide the 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, which does not seem to always be the case in current practices.

Representing the French member-association DLR, ECED Vice-President Philippe Papin welcomed the participants to Paris and more specifically to 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’ voice is heard by all EU decision-makers.

During the opening session, the ECED President presented the newest Corporate Members with a certificate of recognition: Egon Zwinger – Industrie Holding (pictured); Dr. Pedro Gameiro – MOTIVO Portugal; Philippe Papin – Toufflin MTP and Robert Pain – MEDIMAT. A special certificate was awarded to Francis Gilberg, DLR Secretary General, for his support to ECED and for initiating the partnership with INTERMAT

The morning session then kicked off with an enlightening presentation from BNP Paribas Leasing Group, outlining the importance and different ways in funding construction equipment purchases during the crisis, followed by a detailed insight into the US Economic Stimulus Plan – and more specifically 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. Mr. Mack again stressed the need for an equally strong European association, and warmly 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 .

After a first coffee break, David Phillips from Off-Highway Research gave a much-appreciated presentation on the global challenges for the construction equipment industry and, when asked by the ECED President, stated his belief that dealers should be considered by the manufacturers as an extension of their marketing and sales department, and such a change in mindset should ensure the positive relationship between both actors.

Over 80 participants were gathered in the Mezzanine of Hall 3 at INTERMAT, which provided a great location to the ECED conference, with an impressive overview of the exhibition that was opening on the same day.

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 to 30% in turnover for rental companies in 2009, Mr. Déprez welcomed the initiative by the ECED President to discuss a general agreement on the maintenance of rental equipment by the dealers and their mechanics.

After the networking lunch, Paolo Cesarini, Head of Unit at the Directorate General for Competition of the European Commission, gave the participants an exhaustive overview of the Commission’s vision on distribution agreements and competition law. Even though participants were at times perplexed by the complex legal matter, which Mr. Cesarini managed to explain quite clearly, a general sentiment emerged that maybe it was time that dealers looked more closely to their own distribution agreements and – with the help of ECED – should ensure that the contracts which manufacturers tend to single-handedly impose on dealers are in conformity with EU Competition Law. This topic will certainly remain one of ECED’s top priorities in 2009, and Mr. Cesarini invited the association and its members to contact his services in order to provide information and insight in the machinery distribution sector, as to contribute to the consultation process that the Commission will engage in during the autumn of 2009.

Paolo Cesarini from the European Commission was one of the keynote speakers at the ECED conference, and opened the participants’ eyes as to the direct rights their distribution agreements should grant them according to EU Competition Law.

The last part of the conference featured explanations on an upcoming ECED-initiative on End-of-life Vehicles and a one-hour roundtable discussion with the 2 main auction houses for machinery: Ritchie Bros. and IronPlanet. Moderated by the ECED President Dr. José Gameiro, both auction houses 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 phenomena at European level.

Before inviting all participants to a well-deserved cocktail reception, ECED’s Secretary General Tom Antonissen briefly outlined some of ECED’s recent actions in Brussels, while stressing that both the continuous support of the national associations and corporate members of ECED, as well as further cooperation with other European associations, shall be instrumental for improving the current difficult situation most dealers find themselves in these days. Dr. José Gameiro confirmed the need to continue to make ECED bigger and stronger, and promised this intention would be reflected in an even larger conference next year, which will most likely be held in conjunction with BAUMA 2010 in Munich.

The PDF file of the above article can be accessed here.