Rental ambitions

01 May 2008

The new ‘S’version of the 1,6 tonne CC 900 on the production line, showing the offset of the drum.

The new ‘S’version of the 1,6 tonne CC 900 on the production line, showing the offset of the drum.

Dynapac is adding new variations of its combi— and tandem—rollers. The company used Conexpo to introduce a new ‘V’series — the V stands for vision — of its large CC 422/432/522 and 622 combi—rollers, designed primarily for North American customers, but also possibly southern Europe.

The new variations on the tandem—rollers, meanwhile, include two new options for the 1,6 tonne CC 900 machine. An ‘S’version has a single connecting arm on the front roller, allowing the roller to be offset from the centre of the chassis, with the free side extending beyond the side of the unit and allowing the operator to work extremely close to a kerb or wall and then turn outwards. This model will be available from March and will come with a 6 to 7% price premium.

Also new will be a petrol version of the CC 900, using a Honda 22 hp (16,5 kW) engine. This machine is being targeted at North America and Australia, although it will be available in Europe as well.

Rental Plans

Dynapac is also planning to target the growing equipment rental sector with lower prices, rental—friendly machines and additional services such as finance and extended warranties. The company has been carrying out research into the market since its sale last summer by Metso Minerals to Stockholm—based investment firm Altor Equity Partners. Dynapac acknowledges that it is not performing as well in the rental sector as some of its competitors. Approximately 65% of all light compaction equipment — tampers, plate compactors, small rollers — are sold to rental, but just 35% of Dynapac's products in this sector go to rental. The same problem is true of the larger roller market, where Dynapac sells less than a global 50% share of machines to rental.

Ronald Kok, president and chief executive officer of Dynapac, speaking exclusively to CE's sister magazine, European Rental News, said; “We're convinced that rental is an extremely important customer segment… There is enormous potential to expand our rental business — crucially, we have the right equipment, which is the right start.”

A particular target will be the UK and German markets where Dynapac has not been strong. “We will step up our activities…but that doesn't mean that we will dump the prices", said Mr Kok. “We have survived without the UK and Germany, so it gives us an enormous opportunity to increase our business.”

Mr Kok said the company would continue to develop more products specifically for rental — the small CC800, 900 and 1000 rollers launched last year are examples; “We will get machines on the market at the right specification and the right prices.”

Competitive pricing will be one part of the strategy, with a move to source components from lower cost countries in Eastern Europe.

In addition, specifications will be adapted to the needs of the rental market; “Some products are probably over—engineered", said Mr Kok, “The quality doesn't have to be twice as good as the competition.”

Dynapac is also developing a finance offering for Europe that will be unveiled sometime next year. In addition, the company is looking at extended warranties.

Mr Kok said the structure of Dynapac's sales channel was changing, with direct sales to rental companies assuming a greater importance, and he said that traditional dealers would have to adapt; “All these rental companies will need service. Will they set up their own service operation, or will we have our own service points, or will we sub—contract the service? In the future the dealer looks like it will be the service centre.”

He also believes that rental companies will start to offer wider services that pure rental; “What is to stop rental companies offering long term leasing agreements?”He confirmed that Dynapac would not enter the rental market directly; “We take risks in business, but that would be suicide.”

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