Massive Opportunity in the Equipment Rental Market
The numbers are staggering. In 2014, the global construction equipment rental market was valued at over $34 billion, and is anticipated to reach almost $85 billion by 2022.
On a slightly smaller scale, we’ve seen heavy equipment rentals increase across the United States and this trend isn’t expected to end any time soon; the U.S. rental market is expected to grow 4% between this year and 2024.
A survey of over 70,000 business owners, CEOs, managers, and procurement professionals between 2011 and 2014, revealed heavy equipment rental increases across the USA, with some equipment categories growing by as much as 1,000%.
With such a large market size and high growth rate, the opportunity for manufacturers, distributors and rental companies is massive. Infrastructure investment is expected to continue to increase over the next five years, which means now is the time for rental companies to add to their fleet, keep up with demand, and maximize their revenue.
Should Equipment Managers Buy or Rent Equipment?
Construction companies have differing reasons why they choose to rent vs. buy their equipment, and the favored types of rental equipment has changed over time, as Tier IV engine regulations, new technologies, and more flexible financing open new opportunities for equipment managers.
According to Ritchie Bros, there are five factors to consider when making the decision to buy or rent:
- Current financial situation
- Cost of ownership vs cost of renting
- Length of project or job frequency
- Equipment availability & usage
- Fleet management and inventory control
Challenges For The Rental Market
Of course, the rental market has its own challenges. Manufacturers and distributors who understand these challenges can help serve the market better and ensure their own success within it.
According to the European Rental Association’s (ERA) Committee on Equipment Technology, the top business challenges facing the rental market are:
- Wasted job opportunities – no shows, wrong person, wrong equipment
- Revenue not captured
- Equipment under-utilized
- Equipment breakdown – lack of maintenance
- Financial risk of unqualified operators
- Total cost of ownership (damages, accidents, maintenance, etc.)
- Standardization where possible (decals, marking and indicators, safety signals)
- Simplified instruction manuals and training (operation, maintenance, safety, e-learning)
- Parts management
The ERA states that 70-80% of repair costs come from equipment damages. These uncontrolled expenses have resulted in rental companies choosing equipment that will minimize the impact of equipment damage, and purchase decisions are based on several important factors:
- Reduced delivery time of parts
- Reduced logistic costs
- Cheaper parts
- Simplified replacement process
- Standardized equipment and parts, where possible
By recognizing and acknowledging these challenges, manufacturers and distributors have the opportunity to create rental equipment that meets the market demand. For example, the market has demonstrated a clear need for equipment that can be repaired quickly, easily, and at minimal cost. Manufacturers and suppliers who meet this need will set themselves up for success in 2019 and beyond.
The G30 Air Compressor, Built For the Rental Market
The VMAC G30 gas engine driven air compressor is one example of equipment that was designed for the rental market, where size, weight, reliability and durability matters.
For the buyer who needs a low total cost of ownership, this air compressor is the most affordable gas drive rotary screw air compressor available. For the equipment manager who needs to maximize productivity, this air compressor produces up to 30 CFM, 100% of the time—the operator doesn’t have to wait for air pressure to build.
Common jobs that use the VMAC G30 air compressor:
- Light/medium duty mobile mechanics
- Mobile tire service technicians
- Light duty contractors
Common tools that are powered by the G30 air compressor:
- 3/4” impact wrenches
- Backfill tampers
- 2” Horizontal grinders
- Chipping hammers
- Die grinders
- Tire inflation
Highlighted benefits of the G30 for the Rental Market:
- 50% lighter, smaller, and more powerful than reciprocating gas drive air compressors.
- Backed by the best warranty in the industry, with a VMAC Lifetime Warranty on the compressor, and a Honda 3-Year Warranty on the engine.
- Only 205 lbs, and measuring 5” (l) x 20.3” (w) x 20.7” (h)
- Powered by a Honda GX390 air-cooled 4-stroke engine.
- Includes an integrated ACDelco 12V, 300 CCA, 360 CA battery.
- Optional Cold Climate Kit, proven at temperatures of -30oC (-22 oF)
- Optional Protective Cage, adds 110 lbs to weight and measures 35” (l) x 23” (w) x 25.75” (h).
VMAC is proud to design and manufacture the most affordable gas driven rotary screw air compressor available. To learn more, visit the VMAC G30 webpage.