Source: IronAdvisor Insights by Jarrett Harris, Director of Research
For the past several quarters the overarching theme in the new construction equipment market has been pretty straightforward: OEMs have been offering aggressive incentives on new machines, and these programs have generally been successful in boosting sales. But no one in the industry expected this to last forever—not with OEMs facing high production costs related to tariffs. So the debate has centered around the interplay between margins and volumes: will OEMs continue to discount new equipment sales in order to move more units, or will there come a point when programs are rolled back so margins can expand even if volumes taper? Put more simply: will OEMs prioritize unit volume growth or margin growth?