Volvo to provide growth capital for North American rental business

Volvo said it is ready to provide capital to assist its North American rental franchise partners expand their business and was "not afraid" of acquiring franchises if they were not capable of funding their own growth.

Olaf Persson, president of Volvo Construction Equipment, speaking at Volvo's Conexpo press conference, said; "We are expanding the rental business and have growth capital available for this."

He said the Volvo Rents franchises had gone through tough times, but that they were now seeing the market bottoming out and rental prices and utilisation starting to rise. "We have to support this market to have the right capital to grow...we are not afraid to buy out franchises to make sure they have the resources to exploit the growth opportunities."

IRN understand that some rental franchises in North America have already been acquired by Volvo CE.

Mr Persson said he had no doubt that the company had been right to establish its Volvo Rents business; "I truly believe it was the right decision...We now have a very good outlet for compact machines." He said it had given Volvo access to new markets and customers.

He also confirmed that Volvo had no current intention to open up Volvo Rents in the UK. "For the time being, but we are always looking into different business opportunities."

Volvo recently announced further US$100 million investment in its Shippensburg facility in Pennsylvania, US. Part of this involves a relocation of Volvo Rents' head office in Asheville, North Carolina, to Volvo's main US facility in Shippensburg. That move will be completed by September 2012.