Doug Olberhelman, chairman and CEO, Caterpillar, Peoria, Ill., said rental worldwide is a growing percentage of the company’s business during a press conference last week at CONEXPO/CON-AGG in Las Vegas.
“If we aggregate it all together, it is the largest rental fleet in the world,” Olberhelman said, adding that the company will be looking at how to do a better job in addressing customer needs.
“We are happy with our model. Our dealers are independent in each territory and dealers have been asking us to help in this area,” he said.
Olberhelman also said contractors are among the company’s customer base who have extended the replacement cycle of equipment, resulting in more demand for renting. “We’ve seen growth in demand for rental assets that we haven’t seen before. As contractors and customers deal with less certain futures, the pressure valve in replacement manifests itself through higher demand for rental,” he said.
He is not, however, convinced that there has been a secular shift to renting versus owning equipment. At least not yet.
“That’s a question we’re putting a lot of intellectual horsepower behind as well. Certainly equipment rental utilization is better. I don’t know if we’re seeing a secular long-term trend to that or not, but we are seeing that number going up,” Olberhelman said.
“We haven’t seen the volume since 2006 or 2007 of what the normal demand cycle is for equipment, so I would not declare a secular change until we see some of that come back. Certainly rental is more popular today and it’s a good way for contractors to make more money. That very question is one we spend a lot of time on. We need more evidence and I think time will show how that will sort out,” he said.
