Cat dealer Pon closes rental operations in Sweden and Denmark

Caterpillar dealer Pon Equipment is to close its Cat Rental Store businesses in Sweden and Denmark because of difficult market conditions. The company said it will focus instead on strengthening its Norwegian and Netherlands rental operations.

Mr Inge Stensland, managing director of Pon Equipment in Norway and vice president for rental and used equipment at Pon Equipment - who is responsible for rental in all four Pon territories - told IRN that the move out of rental in Sweden and Denmark was temporary until business conditions improved.

"In Denmark the construction market, and the economic situation, is very, very bad, and it's going to stay rather bad for some while", he said, adding that the Pon would return to rental when conditions improve and with its own rental model. The Pon rental business in Denmark is based on a company acquired some years ago.

Mr Stensland said the Swedish rental business was very small, and that Pon preferred to cease renting until the climate was better.

"We will go back into rental in these countries when the time is right, whether it's one year or three years", he said.

He said the key message was that Pon would invest in the Norwegian and Netherlands rental businesses; "We will be very focused on growing these two markets. That will be evident in 2011 when we will expand our coverage in Norway and with big investments in both countries."

In Norway, Pon currently has rental operations primarily in Stavanger, but will open locations in Bergen, Kristiansand and Trondheim in time for the Spring season next year. The company is currently building a new Pon-Cat facility in Oslo which will be open by March 2014 and that will include a rental business.

In the Netherlands, Pon owns the rental business Rental Force. Mr Stensland said it already had good geographical coverage but that Pon would invest in its fleet in 2011.

The decision to close the rental operations will affect one person In Sweden - who has been offered a new post - and 11 in Denmark, where Pon is helping those affected to find new employment.

The Pon Equipment rental model differs from some Caterpillar dealers in that it focuses on renting Cat machines and is not adding other equipment supplied by Cat Rental Store ‘allied vendors'.

Mr Stensland said he viewed rental as being an activity in support of the Cat dealership and its customers, alongside sales of new and used equipment and aftermarket services. He said sales of Cat machines from the rental fleet helped to increase the installed base of machines.

"The objective is not to have the biggest market share in rental, but to be the leader in renting machines within the construction machines rental business", said Mr Stensland, "That's the long term target. We are growing our business faster than our competitors."