Now celebrating its 10th anniversary, Cat Rental Stores have grown from 65 locations at the end of 1998 to 1,429 locations worldwide this year, with expectations to grow to 2,000 stores by 2010. Combined dealer rental volume exceeded $4 billion in 2007, and Thompson Machinery opened the 500th store in North America this month in Biloxi, Mississippi.
“We think rental is an absolutely necessary business,” says James W. Johnson, general manager, Caterpillar Global Rental and Used Equipment, noting that Caterpillar dealers Wagner Equipment in Colorado and Hawthorne in California lead the company’s initial rental efforts.
Caterpillar has a dual rental strategy. Caterpillar dealerships usually take care of long-term rentals, especially of larger machines. Cat Rental Stores handle short term rentals of smaller Caterpillar equipment (around D5-size and smaller) and allied equipment, such as aerial lifts. “From a small equipment business perspective, we also think it makes sense to sell and service machines from our rental stores,” Johnson says. In addition, the firm is conducting a pilot program at a Home Depot in Dallas to test out a supplemental urban strategy.
With an average fleet age of 19 months in 2007, Caterpillar has the youngest fleet in the industry, Johnson says. “It’s absolutely essential we have the right mix of Caterpillar and non-Caterpillar products in our rental fleet,” he comments. “We want to get the message out that our customers can rent a full variety of equipment at our stores.” The typical percentage of non-Cat equipment in a Cat Rental Store is usually between 20 to 30 percent.
