ERA president Déprez praises 'responsible' response to crisis
By Murray Pollok05 June 2010
The rental industry reacted responsibly to the crisis last year, said Gérard Déprez, president of the European Rental Association (ERA) and chief executive officer of Loxam, but he said that recovery would only be visible in companies' 2011 accounts.
Describing 2009 as an "annus horribilis" for rental, Mr Déprez, speaking at the ERA's annual convention in Prague on 27 May, said no one had been spared by the crisis but that "our industry showed consistent and responsible behaviour. Almost everyone stopped opening new branches and all cut growth investment."
Mr Déprez said rental companies had focused on cash generation and some had "deliberately reduced their fleet to boost utilisation rates."
He said that price falls were "unprecedented...The temptation to blame one's competitors is high, but I saw an overall price decrease everywhere, no matter
who the competitors were."
Speaking to an audience of over 250 delegates, the ERA president warned that there would be no quick recovery, repeating his forecast made last year that "recession would peak in spring 2010, and that recovery would be visible in our 2011 accounts."
In addition, he said uncertainty over Greek national debt and the indebtedness of other European countries meant that governments would be under pressure to postpone infrastructure projects that were supposed to boost economic recovery; "This is very bad news for our trade."
Mr Déprez said rental managers needed to "keep going" and learn from the crisis. Looking forward, companies would have to be more aware of their vulnerability to external market shocks and understand that market diversification was no longer a solution because "the crisis hits all sectors simultaneously".
He said the importance of cash "can no longer be underestimated" and that rental companies might have to get used to dealing with "very short-term cycles. I fear that our industry, which is accustomed to long phases of growth, will have to address a greater volatility of its activity and profits."
Read the May-June issue of IRN for a full report on the ERA's Prague Convention.