Why Velafl leads the way in Iceland’s rental equipment market

Iceland’s authorised Hitachi Construction Machinery (Europe) (HCME) dealer Velafl is becoming a key player in developing the country’s construction equipment rental market, through the Hitachi Construction Machinery Premium Rental scheme.

As the market for rental machinery is significantly smaller in Iceland than its other European counterparts, Velafl faced a huge challenge in convincing its customers of the advantages of Premium Rental. The dealer has done a fantastic job in educating them on the financial and practical benefits of HCME’s scheme – so much so, that rental is now responsible for approximately 70% of its business!

Successful strategy

Velafl’s move from selling to renting Hitachi Construction Machinery models required significant support from the team at HCME to ensure the highest level of customer satisfaction. The dealer also implemented specialist servicing and maintenance to complement this shift.

Despite only joining the rental scheme in 2021, this new strategy has quickly thrived with Velafl’s rental offering more than trebling in size in 2022. It now has 37 active Hitachi machines in its fleet, ranging from 2.5 tonne mini excavators to 50-tonne large excavators, as well as wheeled excavators and wheel loaders.

Market leaders

Iceland’s currency and market has proven volatile over recent years and so Velafl’s push for rental options was a perfectly timed solution for many customers – offering a more flexible approach for those who do not wish to invest directly in their own machinery. Paired with excellent expert servicing, many customers thought the concept was too good to be true!

But the team at Velafl have proven this is not the case and have played a key role in modernising this market in Iceland by turning the previously negative perception of rental on its head. According to Hjalmar Helgason, CEO of Velafl: “With the HCME rental scheme, we are giving the customer the best of both worlds.”

He adds: “We are slowly but surely trying to help our customers by giving them the right tools for the right jobs. This doesn’t necessarily mean you buy one machine and use it for everything, it means you can use one machine for a shorter period and then you have the option also to take a multi-use machine for a longer period and then buy it if you’re using it frequently. It’s a good rental investment.”