Renters in France discuss ‘crisis’ response

French rental companies are cutting costs and preparing for a difficult 2009, although most of the larger players have so far held back from closing significant numbers of depots, preferring instead to postpone expansion plans and cut back on capital investment.

Speaking to over 100 rental managers at the DLR's annual rental conference on 3 December, Herve Cohade, president of the DLR's rental division, said the consensus among rental companies was that volumes had dropped by around 10% in October and November.

He urged rental companies to maintain control on prices and not to panic; "I'm not so pessimistic. The forecast for our customers is a 6% fall in activity - public works and building - [which] means for us, maybe, a 10% fall, but not 15% or 20%. We should not lose our control.

"Up to now the reaction of rental companies has been rather more professional than in the past - restricting investment, halting recruitment...these measures have been professional and consistent."

IRN understands that Loxam has not made many significant cuts to its branch network so far, and Xavier du Boys, managing director of Kiloutou, France's second largest general rental company, told IRN that depot closures were not currently planned. He said Kiloutou still had a long term goal to grow its network from 260 to 400 branches and that the slowdown presented an opportunity to reorganise and become more efficient after a period of very rapid expansion.

He said 2009 would be tough, but added that rental companies would be in a good position to grow their business when the market recovers, with contractors more likely to rent than buy equipment.

Thierry Robert, managing director of Bergerat Monnoyeur Location, said that the company had not yet made any depot closures, but that he would be reviewing options in January/February. He told IRN that one advantage for rental companies in 2009 was that they were able to cut back on purchases of equipment, unlike this year when many rental companies had made big orders early in the year and were receiving new machines even as the downturn started after the summer.

Despite the recent slowdown, some rental companies have had a good 2008. Charles Debaud of Locamex Holding told IRN that the company had opened its 17th branch as recently as November and that it will have record revenues this year, despite a falling off of demand in the final quarter.