Wednesday, June 22, 2005

Volvo Construction Equipment Rents Inc. Volvo Rents is focusing on Wayne and Oakland counties, where construction is projected to grow 30 percent combined by 2008.

Equipment leasing firm targets Metro area

Volvo Rents to open franchises in Wayne and Oakland to support booming construction.

By Tenisha Mercer / The Detroit News

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Metro Detroit's red-hot construction market has attracted Volvo Rents, a North Carolina-based equipment leasing company that plans to open two local franchises by year's end to capture a portion of the area's growing number of residential and commercial projects.

Construction is expected to reach $6 billion in Metro Detroit in 2005, according to a forecast by the McGraw-Hill Construction Information Group, a market research firm in New York.

A large part of that increase will be driven by new home building. There were 1.2 million new homes built in southeast Michigan in 2004 -- a record year -- and 1.3 million new homes are projected this year, according to the Building Industry Association of Southeastern Michigan in Farmington Hills.

Volvo Rents leases 400 types of equipment, from backhoes and pressure washers to excavators and compressors.

"We go to where the market is building, and this is a real important market for us," said Nick Mavrick, vice president of global strategy and marketing for Volvo Rents in Asheville, N.C.

But Volvo Construction Equipment Rents Inc. may be putting down its Detroit roots at a time when the industry could be headed for a slowdown in some sectors. While the construction of homes, schools and medical buildings is expected to grow, office building starts could cool off.

"There are areas that are struggling," said Michael Lawson, manager of industry relations at Construction Association of Michigan, a trade group in Bloomfield Hills. "No one is doing the (business) they used to. There is so much uncertainty."

But Volvo Rents is bullish on its concept.

It plans to open franchises in Wayne and Oakland counties, where construction is projected to grow nearly 30 percent combined by 2008, according to McGraw-Hill. Volvo Rents plans to rely on its franchise business model to survive a potential downturn in the marketplace.

Equipment will cost $100 to $500 for daily, weekly and monthly rentals.

"The local contact is key," Mavrick said. "A local owner is best prepared to ... be quicker and more flexible in dealing with the customer. "

Construction firm owner Bryan Mazurkiewicz sees plenty of need for Volvo's concept. He recently needed a sweeper to complete a job, but had to subcontract the work because he couldn't rent the equipment, he said.

"It's a need in this market," said Mazurkiewicz of Orchard Development in Clinton Township.

Volvo Rents operates 63 stores, but plans to open 20 to 30 stores a year, Mavrick said. The company has expanded to Italy, Portugal and Canada in recent years and has agreements with 50 operators to open more locations, he said.

Volvo Rents is the fourth-largest manufacturer of construction equipment. The company is a division of Volvo Construction Equipment North America Inc., which is a part of Sweden-based Volvo Group that makes trucks, buses and engines.

You can reach Tenisha Mercer at (313) 222-2401 or tmercer@detnews.com.