When we produce something in abundance and do not find many buyers to buy them. It is better that we get the stuff auctioned. It is not that people are not ready to take but it is just that they are not ready to take it at the price you are willing to sell. Ideally, people like to put a price to it. So if they know that you have the stuff in surplus and are still charging more for it, they might simply not show any interest for it but that does not mean they do not want it. They only want you to bring the price down. You either bring it down or you put it in auction so that people determine the price of it on their own and the one who makes the highest bid goes away with the item.
When we talk about heavy equipment, the heavy equipment manufacturing companies also produces machines in bulk and at times they find that there are not much takers. They do not mind reducing the price of the machines but if they still do not find any buyers, then the best option available with them is to auction the surplus heavy equipment. One should not see the heavy equipment that are there for auction as inferior piece of metal. They are as good as any other heavy equipment that is sold at high price.
One may simply wonder why heavy equipment manufacturing companies have to produce in abundant and then later sell it in auction. Well, they do not produce machines in surplus. They go as per the orders they receive from their clients. However, at times some orders go kaput and the clients back off from the order. They do not do this intentionally but they must have their own reasons behind doing this. Now, when there are no takers for the heavy equipment produced by the companies, they are compelled to sell it in an auction at a dirt cheap price. It is primarily these items that goes as surplus and have to be dealt with by getting them auctioned. In this way, the companies that produce machines get saved from booking huge losses and in the same way few lucky chaps get away with a good bargain.
Auctions can happen in many ways. They can put it up in a local newspaper so that people get to know about it or can just spread the word within their existing clients. They probably do not want to involve good chunk of people in the auction and want this to be a kind of hidden sale. They do this for 2 reasons. The first one is they do not want a large population to know that one of their client has backed off. This has have serious implication on their brand image and the second reason is they want their existing clients to have a good piece of the meat by auctioning the equipment at a much lesser price.