Caterpillar updates strategy on European rental

Caterpillar is taking a less prescriptive approach to the development of the Cat Rental Store network in Europe, with dealers still being encouraged to rent but not necessarily by creating a separate rental business.

David Picard, director of product support and sales operations for Europe, Africa and the Middle East, speaking to IRN at Intermat, said dealers were previously steered towards creating separate Cat Rental Store operations; "Having two separate companies...didn't always make sense from the customer point of view; they want one point of contact for all they need, rental, used, new...It's no longer a one-size-fits-all approach."

Some dealers, such as Zeppelin and Avesco, will stick to their model of having separate rental operations, said Mr Picard, but others will choose a more integrated policy; "We're encouraging our dealers to focus on key segments, and not to be all things to all people."

In the case of two major European markets where Cat dealers have sold their rental businesses - Finning in the UK and more recently Bergerat Monnoyeur (BM) in France - Mr Picard said they were each taking particular approaches to rental.

In France, BM would rent from its own locations and also start to target the smaller and medium sized rental companies who are facing tough competition from national renters. Mr Picard said BM would look to partner with these smaller rental firms "not as a franchise, but they could be part of an allied network, and they could display the Cat Rental Store brand." He said partnerships like that would make sense where BM did not already have branches.

In the UK, Finning is already renting heavy equipment through its Finning Rents operation, and Mr Picard said they would also target partnerships with smaller rental companies as well as maintaining contacts with certain key customers, such as Select Plant. "In the UK, we prefer to work with smaller rental companies - we have not had much success with larger renters," he said.

Mr Picard said he was expecting higher investment in equipment by the rental channel in Europe this year, and that "the Cat Rental Stores will be a big part of that, and will be growing."

He said rental offered equipment users customers operational and risk management benefits; "We see the rental market in Europe taking about 40% of deliveries - maybe 50% in BCP products [compact equipment]. In the UK its 70% and France and Germany more like 30%. By 2015 it will be 40%."