Why Consolidation Strengthens the Rental Dealer’s Hand

Massive consolidation is transforming the U.S. rental industry. Big players like United, Sunbelt, and Herc are swallowing up competitors at an unprecedented rate. But while they bulk up, dealerships have something the giants don’t: stability, local expertise, full-suite solutions, and the power to control their market.

• United Rentals: Strategic, Large-Scale Acquisitions

United Rentals isn’t buying for the sake of buying. They have been highly selective, acquiring companies that create substantial strategic impact. Notable acquisitions like Blueline and Ahern have expanded their core business, while specialty rental acquisitions such as YAK Access, BakerCorp, and General Finance have diversified their portfolio. United’s acquisitions are significant, averaging over $1 billion, and aim to strengthen its market position through scale and specialization.

• Sunbelt Rentals: High-Volume, Systematic Growth

Sunbelt has taken a different approach in targeting mid-sized regional rental companies. Sunbelt has expanded rapidly, integrating new locations with ease. The average acquisition size is significantly smaller ($20-25 million), but they have added 150+ new locations in the past year alone. Their goal? Volume and seamless integration.

• Herc Rentals: Aggressive Market Expansion

Herc is aggressively pursuing growth, their H&E acquisition the latest demonstration of their market share grab. By increasing its number of branches and combined revenue, Herc is closing the gap with Sunbelt in terms of national footprint and competitive scale.

As these three dominant players continue consolidating, the industry will evolve in several key ways:

• Narrowing Pricing: Competition will drive more aggressive pricing strategies, tightening the range of rental rates across the industry.
• Elevated National Account Programs: Loyalty programs akin to those in the airline industry will become essential for retaining large-scale customers.
• Market Bifurcation: The market will increasingly be divided between the “big three” and the independent dealership rental sector, with the number of mid-sized players shrinking.
• Digital Transformation is no Longer Optional: The nationals have an advantage in their tech platform maturity. Tech spend and innovation will increase as competition to efficiently serve customers increases.

In an era of consolidation, dealerships hold several key advantages that can differentiate them from national rental giants:

1. Stability and Community Ties

Unlike acquired rental companies swallowed into a national conglomerate, dealers remain long-standing, family-run, and rooted legacies. This legacy builds trust – even with employees who can get lost in the merger shuffle.

2. Brand Recognition and Full-Service Capabilities

The strength of an OEM-backed dealership provides a unique value proposition. Customers benefit from what nationals can’t always offer:

• Reliable and well-maintained equipment
• One-stop shop – rent, purchase, or service in-house
• Brand loyalty that fosters trust and long-term relationships

3. Competitive Rental Rates and Market Control

OEMs dictate acquisition pricing, giving dealers a potential advantage over large rental corporations that must source from multiple suppliers. If played right, this means competitive rental rates and market control. However, dealers must advocate for pricing structures that prevent acquisition costs from becoming a barrier to competition.

4. Localization and Customization

One of the biggest strengths of dealers is a deep understanding of their local markets and customer needs. This allows for:

• Personalized service
• Flexible rental and purchase options
• Stronger customer relationships built on long-term support rather than transactional interactions

Consolidation is real, but so is the dealer advantage. While consolidation among the industry giants is reshaping the rental landscape, dealers are uniquely positioned to thrive by focusing on stability, brand strength, competitive pricing, and localized service. By playing to these strengths, dealers can carve out a strong and sustainable position in the evolving rental market.