In the last decade, contractors have been increasingly receptive to the idea of renting equipment rather than owning it. They want competitive rental rates, guaranteed uptime performance and the latest products on the market. They are also looking at rental centers as convenient, one-stop shops for all their equipment needs.
The rental boom has been so intense that some manufacturers have been directly involved either by the outright purchase of rental companies or through surrogates. But our company believes that manufacturers should stick to their core competency - building equipment. That's why we are developing a stand-out dealer network and investing heavily in our product offerings, many of which are rental-oriented such as mini-excavators, rental-spec backhoe loaders and compacts. This way we can provide the most reliable equipment for a wide range of applications and can allow the frontline dealers and rental outlets that we are affiliated with to put machines in customers' hands.
In the North American market, we recently made substantial investments including the construction of a $62 million manufacturing facility near Savannah, Ga. The plant has been up and running since January, concentrating initially on center-mount backhoe loaders. But the property has the capacity to handle our entire construction equipment line that has more than 60 models.
In the U.K., where our world headquarters is located, rental accounts for 60 to 70 percent of the equipment in use. There the idea of going into competition with your most important customer makes absolutely no sense. Likewise in the United States, we have developed partnerships with established companies such as Hertz, Prime Equipment, NationsRent, and United Rentals, along with a large number of JCB dealers that rent as well as sell equipment.
The rental industry's distribution channels continue to undergo major structural changes, and the impact of e-commerce has barely been felt. So predicting what the future holds for rentals is difficult. No matter how the market turns, manufacturers must try to respond quickly and put resources where contractors need them.
