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Chris Jones

Heavy-Duty Competition? They Can Dig It

1 September 2004

In a step that could literally move the earth, an aggressively growing international heavy equipment supplier will soon dig into Southern Nevada's booming construction market.

And while The Volvo Group's franchises aren't likely to open here until next year, local contractors already expect the added competition to benefit their industry through improved customer service, increased pricing options and a better selection of equipment.

"We can get excited about having another player in town as a contractor," said Larry Fortin, whose utility contracting Kaccel Communications Services operates about 35 pieces of heavy equipment at job sites around the valley.

"They need another player in town (because of) limited resources; there's just not equipment in town," Mike Peek, project manager for Boulder Construction, said. "If you try to find a blader or major, larger pieces -- they're just not available" because of high demand.

Volvo Construction Equipment Rents, commonly called Volvo Rents, is a subsidiary of Sweden's The Volvo Group, a publicly traded company whose divisions also include Mack Trucks, Renault Trucks and Volvo Buses. Within the next nine months, the company wants to open the first of three franchises in Nevada's Clark and Nye counties, as well as Mohave County in northwest Arizona.

Volvo Rents' interest in Southern Nevada and its environs isn't difficult to explain, as evidenced by the seemingly endless flurry of heavy equipment activity at construction sites around the valley.

McGraw-Hill Construction Dodge data cited by Volvo show Las Vegas is the nation's 11th largest construction market with approximately $8.5 billion in projected spending this year. That figure is expected to reach $8.9 billion by 2008.

Outside of sales volume, manufacturers also value this area as a proving ground for demonstrating the durability of their heavy excavating equipment before marketing it in other markets.

"It's tested here like no other place in the world," Fortin said.

As a new entry, Volvo will have to compete with several established players in the local market, including Cashman Equipment, a Caterpillar dealer that's sold and rented heavy equipment in Southern Nevada for more than 70 years, and Blaine Equipment Co., a large John Deere dealership.

Blaine Equipment owner Dayton Blaine, who has done business here for 25 years, believes the market is overcrowded even without Volvo Rents.

"There's too many everythings. Too many Burger Kings, too many McDonald's and too damn many contractors," Blaine said. "We're flooded with equipment. ... You might have to wait 30 days, but you can get anything you want."

Cashman Equipment did not return calls.

Volvo's products have been available here for the past three years at Arnold Machinery, an authorized dealership. But Volvo Rents spokesman Nick Mavrick said his company will aim for a different market, offering a wider array of products from more than 100 different manufacturers.

"Anything from a saw to a pump, pressure washer or air compressor that Volvo does not manufacture ... to things Volvo does make like skid steers, backhoes and mini-excavators" will be available at Volvo Rents, Mavrick said.

Volvo Rents will focus on the needs of contractors with 10 to 50 employees that do not have the ability or desire to buy equipment, Mavrick said. Industry data show approximately 35 percent of the construction industry now favors rentals, he said, though that ratio is expected to climb to one-half within the next three years.

"We're really aiming at supporting customers who rent a lot and require a high level of service," Mavrick said. "When their machine is down, they lose hundreds or thousands or millions of dollars on a job if they don't meet their contractual deadlines.

"They rely on you. They may call you at midnight to open up your store and drop off a pump at a job site when something flooded," he said of Volvo Rents' customers, which have so far been limited to 40 other markets.