Newsletter #095 (View other news stories)
RENTAL ROUNDTABLE IDENTIFIES INDUSTRY ISSUES
CHICAGO, United States
Thursday, 20 Feb 2003
The Association of Equipment Manufacturers (AEM) says rental fleets are older, third-party maintenance is increasing and lower profits are being achieved on used equipment sales.
Those issues were cited in a report, released last week, from a "rental roundtable" discussion conducted by the AEM late last year.
Some rental companies had reported that, to keep renting aerial work platforms and telescopic forklifts competitive with ownership, they had to age fleets longer. The average replacement age of large equipment was six to eight years, the AEM found.
Many rental companies were seeing an increase in third-party maintenance business. One company said its maintenance work increased 18 percent in 2001. While it was not a substantial revenue earner, it provided high-margin business.
Auctions of used equipment had decreased substantially over three years, the AEM said, but auctions were still seen as a valuable equipment disposal method.
While globalisation of the equipment rental business was inevitable, it posed challenges now and in the foreseeable future, the AEM found. Differing business structures across borders would make global business difficult for rental firms, as would government regulations on exports from the USA.
Rental companies were expanding their product ranges to include more specialised, low-volume equipment, despite adding little to overall profitability.
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