Cat sees rental return, shift in European Cat Rental Store strategy

05 April 2011

Chris Gustafson, Caterpillar's division manager for Rental and Used in the Americas region.

Chris Gustafson, Caterpillar's division manager for Rental and Used in the Americas region.

Caterpillar is seeing growing demand for equipment rental as markets recover because contractors are still uncertain about investing in their own equipment.

Speaking at Conexpo, Cat's group president, Stu Levenick, said the company was seeing a renewed focus on rental as a way of obtaining equipment; "A lot of contractors went through a difficult time...we would see higher demand for rental in the early parts of recovery than we would otherwise see. That's a trend that is happening around the world."

Mr Levenick also said that Cat Rental Stores in Europe were shifting towards a more "integrated" rental-used-sales dealership model and away from the full ‘rental service' model that some favour.

Examples of this include Finning's sale of its Hewden rental services company in the UK; Pon's closure of Cat Rental Stores in some Scandinavian markets; and Barloworld MERA in Spain moving away from renting allied products.

Asked if this meant that Cat's European dealers were retreating from rental, Doug Oberhelman, Cat's chairman and CEO, said that was a misreading of the situation and that some dealers had simply disengaged from "part of the rental space."

Mr Levenick said there was no change to the Cat Rental Store strategy in North America - where rental is well integrated with the sales and used equipment operations - but that "we're trying to move more towards the North American model in Europe." The integrated model sees rental being an integrated service alongside traditional sales of new and used equipment.

Both men added that dealers had the financial strength to reinvest in their rental fleets after the recession. Mr Levenick said they remained focused on rental "and in a position to reload."

Caterpillar's manager for the rental and used division in North and South America, Chris Gustafson, told IRN that Cat was seeing a good recovery in demand for equipment from its dealers; "We are seeing strong growth in rental...we clearly see our dealers' appetite to invest is very strong right now."

Despite Mr Levenick's comments about a focus on the integrated model of rental, and in some cases a shift away from pure rental services in Europe, Mr Gustafson reiterated Caterpillar's commitment to its allied products programme, under which Cat Rental Stores rent a range of non-Caterpillar equipment such as aerial platforms, compressors and lighting towers.

He said dealers could approach rental in slightly different ways, but that allied products were still important; "We'd clearly like dealers [in North America] to expand with allied equipment even further - we think it's important to grow their customer base. We believe that having allied products allows them to be more successful with Cat products."

He said there was balance to be reached between allied and Cat equipment; "We don't want to be an allied [rental] company...We need to be in allied, but not too much."

Mr Gustafson said rental rates in North America had hit the bottom and that Cat dealers were starting to see some increases, while utilisation rates were strong.

Meanwhile, Caterpillar has now rolled out a new Cat Rental Store website that provides customers with information on the locations of Cat Rental Stores and on product ranges, and conduct online discussions with Cat Rental Store staff. It also allows customers to request quotations, although live online renting is not yet offered. The website will be expanded to cover South America and Canada before the end of the year.


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Ollie Hodges Publisher Tel: +44 (0)1892 786253 E-mail: [email protected]
Lewis Tyler
Lewis Tyler Editor Tel: 44 (0)1892 786285 E-mail: [email protected]