Spanish rental companies look for positives

Spanish companies continue to seek ways to survive the crippling recession in the country, but efforts are being hampered by a lack of cooperation between rental companies and a continuing over-reliance on the construction sector.

Juan José Torres, president of Spain’s rental association ASEAMAC, speaking at a meeting of 120 rental managers in Madrid on 1 March – organised by ASEAMAc - said the industry continued to suffer; “We are going through a time of uncertainty: the depots are full, machines don’t have enough work, and rental companies have to go to auctions. There is a very tough price war.”

Although no clear statistics are available, many in the rental sector believe that there is still overcapacity in rental fleets, even after five years of low investment and auction sales.

José Manuel Rubias, director general of Loxam in Spain, said; “There is a dangerous cocktail - less demand, price cannibalism, a lack of credit, late payments, write-offs and an ageing and idle fleet”.

The meeting heard that many rental companies do not share their fleet through re-rentals – a practice that is common in other markets – and that the availability of low-cost used equipment sold at auctions had actually led the creation of new rental companies, exacerbating the problem.

Spanish rental companies are being encouraged to try to rent equipment in other markets and also diversify away from the construction sector.

José Castaño, director de machinery at Spanish contractor Ferrovial, said there was an opportunity for Spanish rental companies to move outside Spain. “As the transfer of equipment is complicated it is sometimes better for us to use local companies or companies that already have an international presence.

“The problem is that the rental service offered is not like we have in Spain. So we try to use our contacts in Spain. There is an opportunity for manufacturers, distributors and rental companies to participate with us in our international projects."

Michel Petitjean, secretary general of the European Rental Association, said there were some reasons for optimism, highlighting recent Euroconstruct and Eurostat figures that showed construction growth in the last two months of 2012; “If we look at Eurostat and Euroconstruct, it seems that construction in Spain is on another path and stands above the rest of the EU...something is happening in Spain."

A full report on the meeting will be published in the April-May issue of IRN.