Indian rental leader: ‘OEMs should not rent’

A senior figure in India’s equipment rental business said manufacturers should not rent equipment and has called for a debate on the role of OEMs in rental.

Jitender Aggarwal, Chairman and Managing Director of AGGCON Equipments International, said OEMs were entering the rental business and that it was detrimental to the industry; “All the stakeholders of the infrastructure sector need to work in synergy together. We all need to find a profitable balance where all stakeholders can support each other for mutual growth.

Construction of a flyover in Kolkata, India, in February this year. (Photo: Reuters)

“When construction companies or contractors want to purchase equipment, OEMs should sell, but when [they] want to rent, OEMs should not supply on rent, [but] instead coordinate with equipment rental companies to provide equipment”.

Aggarwal said the rental industry had raised its concerns about the role of OEMs in the past; “the matter has not been discussed effectively yet. Therefore, this is an opportune time for the rental industry leaders to deliberate on this and discuss with OEMs.”

AGGCON, which is based in Faridabad close to New Delhi, rents heavy equipment throughout India. It was established in 2003 and provides equipment mainly for customers in infrastructure and mining.

Jitendar Aggarwal, Chairman and Managing Director of AGGCON Equipments International in India.

A spokesperson for AGGCON told International Rental News that both equipment dealers and OEMs were getting directly involved in rental, and it was the role of the OEMs that was of primary concern.

Satin Sachdeva, Founder and Secretary General of the Indian Construction Equipment Rental Association (CERA), gave his support to Aggarwal, commenting; “Manufacturers should focus on equipment sales and after service only, rather than entering into the rental vertical.”

He echoed the call for a debate; “OEMs have to work in harmony with rental players by giving them 100% support.”

IRN reported earlier this year on a study by Off-Highway Research revealing that as much as two thirds of construction equipment in India is sold to rental companies.