Volvo Rents will benefit from independence from Volvo CE, says Olney

The Volvo Rents business will benefit from its independence from Volvo Construction Equipment through greater access to group capital and an increased focus on its own objectives, said Pat Olney, president and chief executive officer of Volvo CE.

Volvo Rents was a subsidiary of Volvo CE before it was spun off as a separate Volvo group business earlier this year. Mr Olney (pictured here), who took up his post at Volvo CE in May, told IRN's sister magazine International Construction; "The key performance indicators we follow are different... to the rents side of the business, and we recognised that close to half the market in North America goes through the rental channel.

"We want customers who want to come to Volvo to have the option to purchase or rent. By separating the business out it can have its own focus and its own access to capital through the group, because it can be a capital-intensive business, and for it to have a growth focus in its own right.

"I think it's going to have a lot more focus, it's going to allow us to serve that market in a better way, and so far, so good."

Mr Olney said Volvo CE and Volvo Rents together allowed the manufacturer to serve a wide range of customers, and said the existence of Volvo Rents was not impacting its sales to other rental companies.

"Certainly in Europe we and our dealers do a lot of business with independent rental companies and that's very important and valued business to us. There we are not really competing with these customers.

"In North America we have some business we do with some key rental accounts", said Mr Olney, "Their buying criteria are not affected by whether we happen to have some Volvo rental houses. Our approach with the Volvo Rental locations is that they are very locally focussed. They are focussed on specific territories with a local customer base. When we are doing business with these rental accounts, they are buying with us in large volumes for a national collection of stores. I don't think this has really caused us to come into any kind of conflict."

Mr Olney said rental companies had started to buy equipment again, although mainly for fleet replacement rather than growth; "I think cautiously and carefully they are [starting to buy again]. But in my view it's driven by the fact that without some renewal their fleets would get into some very unhealthy age profile. I think we're seeing customers do what they need to do to keep the fleets at the right age profile, but I don't think there's much growth expansion."