Q&A with Peter Schrader of MVS Zeppelin

As part of our preview of the Bauma exhibition in April, IRN asked Peter Schrader, managing director of MVS Zeppelin, for an update on the German rental market and his views on Bauma.

IRN: From your perspective, what are the prospects for the Germany economy in 2010, and in particular for the construction sector?
Peter Schrader: Considering the present sensitivity of the market it is pretty difficult to forecast. Trying to do so, however, we assume that the curve will proceed rather evenly, with a negative trend in particular sectors like residential and commercial construction. A lot of the impacts of the crisis, such as insolvencies, limited financing etc, are noticeable now. Furthermore, the economic stimulus packages which helped support the economy are coming to an end.

IRN: Has the German rental market been badly hit by the financial crisis and the economic recession?
Peter Schrader: The crisis has certainly had an impact on the German rental market. One of the greatest challenges is the oversupply of machines and the worldwide lack of markets for used equipment. This means high costs for rental companies with only a stable or reduced market demand and declining prices, depending on the sector. For 2010 we anticipate a market decline of 5-10% in the construction machinery segment and a 10% decline in aerial platforms.

IRN: What are your views on how the German rental market will be in the coming years?
Peter Schrader: Our guess is that the German rental market will be maintained at existing levels for the next two to three years. As a result of the increasingly competitive environment and decreasing prices - especially in the construction machinery - financial utilisation will decline further. The development of the total market will proceed evenly, with no major ups and downs.

IRN: Many rental companies in Europe have closed depots and made staff cuts. Is this true also in Germany, and what measures has MVS Zeppelin taken?
Peter Schrader: Rental companies in general have only a few options - cutback of depots, staff and assets - to respond to declining revenues and reduce operating costs. As rental prices are not expected to increase, but rather to decrease further, some companies - including MVS Zeppelin - have already reacted, and others will have to respond quickly.

To safeguard the company's future and secure jobs in the long-term, certain measures were necessary. For example, the tightening of the rental fleet in combination with even more consistent asset management. We have also optimised our network of depots, concentrating on bigger rental stores which offer the complete product range and have more staff, situated in economic centres and growth areas.

IRN: Do you think the Bauma exhibition in April will provide a good stimulus to the German market?
Peter Schrader: Bauma was and will be an economic driver. As the world's leading construction trade fair it sets the pace for innovations. Despite the crisis it has achieved a record number of exhibitor registrations, which we hope is a positive indication.

IRN: What are MVS Zeppelin's plans for Bauma?
Peter Schrader: Our main focus is to show visitors what customised solutions can be offered by rental, both generally and in particular from a ‘full-line' supplier such as MVS Zeppelin. Besides construction machinery we will exhibit new and established products like large articulating booms, compact platforms, lifts, hydraulic power units with tools, plate compactors, generators, etc. We will promote our services, which we expand and adapt continuously according to customer needs.

For example, we have extended our expertise in traffic and road safety both by organic growth and acquisition. In this area we are now able to support our customers not only in Berlin, the Rhine-Ruhr metropolitan area and South Germany but also in the north.

Also on the booth we will highlight the Profi-Baushop, which was established in 2007 and whose equipment range has been expanded to more than 5000 different items (consumables, parts and small equipment).