March 20, 2019
It’s all about growth in Rental – grow customers, grow revenue, grow loyalty. Caterpillar’s rental revenue has grown more than 20% per year since 2017, and last year dealers opened more than 40 new branches of The Cat® Rental Store worldwide.
“We’re seeing a clear shift to more and more customers choosing renting over owning,” said Global Rental and Used Equipment Services Director Kurt Norris. “They want flexibility and convenient solutions, so our ability to deliver what they need in Rental is becoming a stand-alone requirement rather than a supplement to retail.”
A growing industry
Rental is not just a growth area for Caterpillar. Rental revenue opportunity across the industry globally is about $90 billion. Total rental revenue in the U.S. is expected to grow by 5.6 percent in 2019 and 5 percent in 2020, according to the February 2019 American Rental Association forecast.
Because of the opportunity in the global industry, Rental and Used were elevated to a focus of the corporate strategy during its refresh in late 2017. Following that, Rental and Used became its own division under Construction Industries with Norris as its director and more than 100 employees dedicated to Rental and Used worldwide.
A winning strategy
The other leg of the Rental and Used Strategy is the Cat Certified Used program, in which lightly used Cat equipment goes through a rigorous inspection and servicing at a Cat dealer to ensure a good-as-new state at a lower price. This allows customers to buy quality Cat equipment at a similar cost to lower quality new equipment.
Another important – but often misunderstood – piece of Caterpillar’s Rental offerings is our wide variety of Non-Cat products. It’s a common misconception that Cat Rental Stores only carry Cat equipment, but thanks to a strong allied vendor network, our stores rent everything from light towers to boom lifts to portable pumps.
“It’s only going to become more critical”
Construction Industries Group President Tom Pellette recently thanked over 350 dealers for their work keeping pace with top rental competitors and underscored the important role Rental and Used play in our long-term profitable growth.
“Rental is critical, and it’s only going to become more critical,” Pellette said.
“We can’t be competitive unless we offer a large, versatile array of rental options, including non-Cat products,” Norris said. “Some customers just want to rent a Cat dozer, while others need a scissor lift, for example. And if you need both, you only want to make one stop. With the Cat Rental Store, you can do that.”