By carrying out in-house maintenance and refurbishment on its fleet, French rental company Accès Industrie is able to keep machines in its fleet for longer and thus keep rental rates low. In addition to an unusual rental model, the experience gained by becoming very closely acquainted with machine design has given rise to another business.
Having sold the Toucan vertical mast machine with jib to Grove in 1988 (later adopted by JLG), Daniel Duclos took some time investigating rental companies and markets all around the world including Japan, Australia, Far East, North America and Europe. At the end of the process he had experienced markets at different levels of maturity and felt he had a clear view of the importance of the rental market
Twelve years ago Mr Duclos found the North American rental market was by far the most mature. Over the years Europe has caught up, although he estimates the USA still has four times more rental units per capita than Europe. Over the next five to 10 years he expects Europe to match the US.
Mr Duclos thinks that to be a significant player inn Europe an Accèss rentals company needs at least 2000 units and 15 depots. Accès Industrie now has around 6000 units and 40 depots: 30 in France, six in Spain, two in Portugal and one in Morocco .
The policy at Accès Industrie is to keep a machine in the fleet for 10 years, most larger Accèss companies keep machines no longer than seven years usually less. Keeping a machine longer means rental return on a machine can be calculated over 10 years rather than seven, five or even three.
Mr Duclos says that experience in manufacturing means that Accès Industrie, "understands the qualities of machines, preventative maintenance and the associated costs. Too many problems and we take the machine from the fleet for remanufacture or permanently."
Mr Duclos says, "If you have a machine that cost you €50000 seven years ago, we can spent €6000 remanufacturing the machine to keep in the fleet another four years, or €60000 on a new machine. Some of our machines are 12 years old"
Accès Indrustrie invests in people and facilities to carry out high levels of refurbishment and remanufacturing but Mr Duclos admits that cosmetically the machines do not look immaculate when they return to the fleet, "They look good enough for a work site," he says, "but not as new."
Remanufacturing carried out by a manufacturer will give you a machine that looks pristine but it can cost up to 60% of the cost of a new machine which Mr Duclos thinks is too expensive.
Mr Duclos is well aware that his model and lower pricing has not made him particularly popular among some of his competitors he says they were accused of "killing the market by dropping prices." His worldwide market research had led him to believe that often prices were too high for potential customers.
"15 years ago a small electric scissor might rent for €150/day this is not a good price for a customer so he will stay with a ladder. Today that same lift will rent at €30/day which is a good price with a sensible profit attached.
"It isn't just about price, it's about focusing on the customer and providing a good service. I don't care about the competition, I do care about the customer," says Mr Duclos.
Seven years ago, during the last recession, Accès Industrie was struck quite hard, "We lacked a strong finance structure and relied too much on the manufacturers," said Mr Duclos, "Nor did we have enough equity. Now we have one syndicated loan of €100 million, good assets and share holders."
Mr Duclos says that the bank is comfortable with the company's level of assets, revenue generation and the maturity of the market. In 2008 the company had a €25 million turnover. "it will be lower in 2009," said Mr Duclos, "but not enough to put us at risk."
Unlike many other of the larger rental companies Accès Industrie is not defleeting, "We refurbish about 30 to 35 machines a month - as we need to," says Mr Duclos.
"We stopped investing in new machines mid 2008 but we had spent between €60 and €70 million in the two years prior to that."
Over the last year or so Mr Duclos says that market share has increased between 3 and 4% to around 15% of the French market, he admits there have been some price deceases but he has 55 to 60% utilisation.
The companies fleet management software makes it easy to discover utilisation in fact it could give you the utilisation, price and downtime of each machine in each of the company's depot in real time. Under utilised machines in one depot can be moved to another where there is greater demand
Details of each of the 10000 customers is also stored on the computer with pricing information. With 4500 enquiries a month which include a significant number of smaller contracts, the system makes it very easy for Accès Industrie to provide quotes and machine availability immediately.
Currently sharing office and workshop space with Accès Industrie is manufacturing company ATN. Mr Duclos is a founder and shareholder of ATN and admits that his vision is responsible for the company's business model but is at pains to point out that ATN is a completely independent company from Accès Industrie .
Headed up by Didier Bufferand, ATN aims to design machines with a working life of upwards of ten years of heavy duty use. The machines must be robust, easy to maintain and simple and inexpensive to repair - the most appropriate technical solution may not be the least expensive, but the goal is to produce machines that are cheap to own in the long term.
Through it's maintenance and remanufacturing activities Accès Industrie can feed the ATN design team with information on which elements work and which don't. The rental company is also able to help with testing the new models.
ATN will soon be adding a scissor lift to its vertical mast lifts and articulated boom Zebra platform and during AI's visit we were able to see the first components of the new scissor which may be shown at this year's Bauma exhibition, but only if ATN is satisfied after testing the product.
The company advocates that rental companies that only care about price may not be attracted to its products. "Maybe we won't work with everybody, but with those that understand our philosophy....We don't need big volumes at the moment our target is to be ready at the end of the crisis."
In the next five years ATN hopes to be ramping up production of its vertical masts, Zebras and scissors to around 2000 units a year.
Mr Duclos feels that the market is starting to pick up, "The crisis had a deep effect on the industry's psychology," he said, "it was in shock." He has noticed the situation with the banks staring to improve and over the last few months customers have starting to want quotations for jobs again.
"I have no idea what volumes will be like for 2010, says Mr Duclos, "Currently 50% of our work is on new build and 50% on existing buildings - we are doing more industrial and commercial work, less in housing."
Mr Duclos believes there is still an educational role to be played by Accèss rental companies, which encourages market growth, "Lots of job sites are still not using platforms when they should. I expect that in the future general stores will all use Accèss platforms, professions such as tree surgeons and window cleaners will have their own platforms."
In the future Mr Duclos would like to have more depots through southern Europe. Italy is a market that interests him and shortly another depot will be opened in Tangiers to augment the 100 unit operation in Morocco. "We have a realistic long term plan, but I don't think this can happen through organic growth."