Another Mini-Success Story in the Making

Despite this success story, Sloan admits that most of his customers remain skeptical about the compact wheel loader. On second thought, he says, perhaps "skeptical" isn't the right word, perhaps "uninformed" is a better choice, because most of his customers are skid steer oriented.

"For our customer base, the compact wheel loader is a new product-they just aren't familiar with it," he says. "We're finding that we have to educate the customer about the machine's capabilities and features-explain that its ability to lift more and higher can make them more efficient in many of their applications, and that articulated steering is an advantage in certain situations. The skid steer will always have its place, but we want customers to realize that the wheel loader is sometimes a better alternative."

But it's a tough nut to crack, says Sloan. Part of CE Rentals' approach to educate potential users is offering to also deliver a wheel loader when selected customers rent a large skid steer. The company is hopeful that this two-for-one approach will allow customers to ease into the use of the wheel loader and discover its capabilities.

"We tell them that we know they want the skid steer to get their job done," says Sloan, "but ask that they try the wheel loader. We're finding that some of the resistance to these machines is coming from the guy in the office or the yard supervisor, who thinks their workers won't be comfortable or safe with the machine. We've even had some tell us that the machine looks top-heavy. It's not, of course, but these are some of the perceptions you encounter from people unfamiliar with the product."

So, has CE Rentals placed itself out on a limb with its compact wheel loaders?

"We might be ahead of the curve here with the compact wheel loader," says Sloan," but I think we're right. A lot of manufactures seem to be betting that the product is going to catch on. If the compact-wheel-loader business develops anything like the mini excavator business, and I think it might, then it will be phenomenal. I think we're getting in on the ground floor of something good."

Economics and advantages
Although CE Rentals charges more for the rental of the Wacker Neuson compact wheel loaders than for skid steer loaders, the machines' low utilization at present, says Sloan, makes the higher rate insignificant in terms of profitability. But he's optimistic. Increased utilization will begin to drive profit, he says.

Taking the long view, Sloan is of the opinion that compact wheel loaders in the rental fleet might provide a better return on investment than skid steer loaders. The company's goal is to replace the fleet every 18 months, but obviously, he says, that goal is influence by sales. ("If we're selling it, then we're replacing it.") But in an economy that is depressing sales, machines might remain in the fleet longer than anticipated, he says, and in that situation, the lower incidence of repair for the compact wheel loader, and its longer service life, versus the skid steer loader, might enhance the overall profitability of the wheel loader.

The same reasoning, he says, might apply to customers who buy the compact wheel loader.

"The skid steer likely will generate a higher return on investment initially," he says, "until you get two years or four years out and start throwing thousands into the machine for parts and repairs. There are fewer wear items on the compact wheel loader, like tires, and I think its smoother operation, compared to the skid steer, should be easier on the machine."

Sloan sees the prospect of selling compact wheel loaders increasing, generally, as rental units acquire hours, allowing dealers to give customers a price break. And if a lower price is attractive to a potential buyer, or at least gives the buyer pause before investing automatically in another large skid steer, what advice would Sloan offer to guide the decision?

If the potential buyer needs a machine to be used primarily in confined spaces, then the skid steer might be the better choice, he says, as it might be if the customer can't transport a larger wheel loader with present hauling equipment.