Volvo Plans GR Metro Rental Sites
GRAND RAPIDS — A projected West Michigan building surge has induced Volvo Construction Equipment Rents Inc. to announce plans for two storage and leasing centers for construction equipment in the metropolitan area.
Volvo Rents, as it calls itself for short, also says it is seeking local franchisees who would be interested in running such operations.
The company is a 3-year-old franchising division of Volvo Construction Equipment North America Inc.
Volvo Construction, in turn, is part of the Volvo Group that includes Volvo Trucks, Mack Trucks, Volvo Aero, Volvo Penta, Volvo Buses and Renault Trucks.
Volvo Rents, based in Asheville, N.C., said in its announcement that its plans hinge upon a McGraw-Hill Construction Dodge projection that shows $2.2 billion spent in construction in West Michigan this year — a pace that it projects to approach $3 billion by 2008.
The McGraw-Hill Construction Forecast for 2008 was $1.6 billion in Kent County, $723 million in Ottawa County and $335 million in Muskegon County. It also projects $177 million worth of construction in Allegan County that year.
Volvo Rents says it plans to open two equipment rental and storage sites in the metro area by this time next year, though it did not disclose the locations.
The company stores and leases compact Volvo construction equipment such as backhoe and skid steer loaders, compact wheel loaders and compact excavators. The firm has set up the franchise program as a channel to bring the group's expanding line of equipment to market.
According to Nick Mavrick, vice president of global strategy and marketing for Volvo Rents, the firm's focus is on daily, weekly and monthly rentals to construction, industrial and commercial clients as well as to homeowners.
He said the fact that the Volvo outlets will be locally owned will help differentiate them from corporate equipment firms.
"I'm not knocking our competitors," he explained. "But it makes a difference when you're a construction company leasing from a local owner whom you know and when you need something in an emergency or after hours or on a Sunday morning."
Mavrick said construction spending growth projections and this region's growth pace, the state's fastest, make the area an ideal market for Volvo's construction equipment and services.
"The construction equipment rental industry is growing, and this is a great time for entrepreneurs to join the Volvo Rents team," Mavrick added.
He said Volvo Commercial Finance lends qualified applicants a comprehensive financial package including fleet financing, working capital, delivery vehicle financing and leasehold improvement financing. He said financing averages between $2 million and $3 million per store.
He told the Business Journal that through Volvo Commercial Finance, Volvo Rents franchisees have a financial partner that can support them in growth, vs what he termed "a typical bank" or other financial sponsor that may not understand or have the appetite.
Volvo Rents was founded in 2001 with 16 North American locations, a number that since has risen to 40. He said the firm has sold more than 400 units of equipment that has been leased to about 25,000 end-use customers.
The firm says that it projects adding 50 new lease locations annually.
The Volvo Group, a publicly held company headquartered in Gothenburg, Sweden, had sales of $22 billion in 2003.