Equipment Strategies: Why Rent?
COVER STORY
NEW USED
RENTAL
by Marcia Gruver Doyle
WHY RENT?
A sour economy has underlined – and put a few
exclamation points behind – the rental option
T
here’s an interesting split
going on in rental these
days.
“Almost every national
rental company has seen double
digit growth, and that’s not with
double digit growth in the end
markets,” says Matthew Flannery,
executive vice president, operations and sales, United Rentals. “I
don’t see it slowing down in the
near term.”
Working with the American
Rental Association, IHS Global Insight projects total North American
construction and industrial equipment rental revenue to reach an
annual growth rate of 18.9 percent
in 2015. That equates to more than
$29 billion in revenue in 2015,
well above the 2007 peak of $25.4 billion.
And yet in this revitalized rental market many contractors are still struggling to find work. What gives?
Late-breaking news:
In a $4.2 billion transaction, United Rentals has
bought the number-two
player in the rental market, RSC Holdings. United
Rentals says the buy
creates a company with
“more attractive business mix, greater scale
and enhanced growth
prospects.” In addition,
the combination will accelerate United’s growth
with industrial customers
and “provide a lower cost
base and less volatile
revenue profile to better
position the company
through all phases of the
business cycle.”
using it at a much higher degree than in previous economic cycles,” says
Christine Wehrman, CEO of the American Rental Association.
Recent growth by national chains bears this out. As
of press time, United Rentals just bought Blue Mountain
Equipment Rental, its fourth buy in 2011. Volvo Rents,
converting from a purely franchise model to a mix of
both franchises and company-owned stores (see story on
page 43), made more than 50 acquisitions since its reorganization announcement last year. And RSC now has 51
express locations, start ups that allow it quick entry into
an area, and the ability to take time to make a brick-andmortar decision.
And, Wehrman says, independent companies continue
to remain “as strong as ever. They are also replenishing
their fleets. And regardless of the size of the rental company, it’s still a relationship business.”
“This is the greatest period for rental sampling than has
probably ever existed because more people are challenged with buying,” says Frank Roth, RSC’s vice president of marketing and innovation. “It’s a chance for us to
showcase how competitive rental can be against ownership.”
PERFECT RENTAL MARKET?
The deep depths this industry has gone through has created the right conditions for the rental market.
“Contractors are becoming totally aware of rental and
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CORE REASONS
The core reasons to rent haven’t changed much, but
the economy has underlined and put a few exclama-