Impact of Tariffs on Pricing Strategy and Industry Dynamics
Management discussed the ongoing impact of tariffs on acquisition costs and pricing adjustments, noting that industry responses have been rational and similar to past cycles, with some timing differences.
They highlighted that tariff-related cost pressures are being managed through close supplier coordination, with some benefits from timing of price changes.
Management emphasized uncertainty around the magnitude and timing of future tariff impacts, but expects industry to reach an equilibrium over time.
Tariff and Trade Environment Impact and Mitigation Strategies
The company expects around $10 million in tariff-related costs for the full year, with most impact in Q4, due to inventory pre-exposure and sourcing adjustments.
Central has reduced China purchases by nearly 50% in Q3, shifting sourcing to mitigate tariff impacts, and is working on pricing strategies to offset cost increases.
Management highlighted ongoing efforts to work with customers and suppliers to limit margin erosion, with a cautious outlook on future tariff developments.
Tariff Impact on International and Domestic Markets
Management explained that evolving international negotiations, especially in Asia, India, and the EU, are causing delays in asset trading, particularly in sectors like biopharma, semiconductors, and machine tools.
Despite international delays, North American used equipment markets remain on track, with most assets moving normally and some blips in Canada having normalized.
Used vehicle prices have softened, but the marketplace continues to see record asset listings and sales, with management optimistic about future growth once prices normalize.
Dafinchi
