MORRISTOWN, N.J. — Rental companies are likely to increase equipment purchases for an improved business environment in 2003, industry consultant Daniel Kaplan said. However, manufacturers are unlikely to receive significant orders from the rental industry before the 2003 fleet-planning cycle, he added.
In his quarterly column for the Association of Equipment Manufacturers, Kaplan, CEO of Daniel Kaplan & Associates, Morristown, N.J., wrote that most rental companies forecast demand for the upcoming year during the end of the third quarter and beginning of the fourth quarter.
“Generally speaking, it is not economically wise to build fleet after August because the number of months to generate incremental revenues versus the depreciation and interest to carry the fleet for the period of November through February does not justify itself,” Kaplan wrote. Recounting his days as CEO of Hertz Equipment Rental Corp., Kaplan wrote that he sold off as much equipment as feasible between October and February to offset the seasonality of the business versus the fleet carrying costs.
Kaplan said that in 2002, time utilization of equipment, or demand, which typically increases during the summer months, is developing at a slower pace this year than in previous years.
