Fleet News

Rental sector faces crisis of confidence

The European daily rental industry is fighting to maintain confidence in the light of the terrorist attacks on America on September 11.

Rental companies across Europe have seen business slump in recent weeks, as thousands of business travellers and tourists cancel journeys. Tens of thousands of redundancies in the airline industry have hit confidence further.

Industry analysts predict that in-bound traffic has plunged by up to 60% at key European airports - much of it business traffic.

Major rental companies are working with car makers to try and avoid a damaging offloading of stock over the next few months in a bid to defend residuals.

But the manufacturers are already under pressure to force excess vehicles through the market to cut stocks. A new report published this month by industry research company autopolis says car manufacturers are already suffering with massive over-capacity problems.

Autopolis reckons there are 95 plants around the world producing cars for which there is no demand.

International daily rental consultant David Willsher warns in his Fleet News Europe column this month that some operators 'may not survive through this crisis' and those that do 'are likely to be seriously weakened'.

He estimates that if there were a 15% drop in demand from rental companies for new cars, it would mean 150,000 fewer sales next year.

Daniele Overath, spokeswoman for the European Car and Truck Rental Association (ECATRA), whose members operate more than 745,000 short-term rental vehicles across Europe, said: 'Our members say that the situation following the terrorist attacks in the medium-term is very serious. There is a lot of talk of defleeting to help ease the problem. The situation is bad across the whole of Europe - both from business people cancelling trips within Europe and from America.'

And Roeland Moens, vice-president, sales and marketing at Budget Rent-a-Car, said: 'In-bound American business has dropped dramatically, but it is too early to say by how much, short- to mid-term, the segment will be affected.

'Budget is currently defleeting in line with the end of the peak season. And as our orders for next year are not all yet confirmed, Budget's fleet requirements going forward can be adjusted.'

Avis said 'action has been taken to reduce fleet, freeze recruitment, capital expenditure and limit travel spend'.

Paul Fleming, Europcar's general manager in the UK, said: 'Although we are delaying some purchases, it's vital to be positive — this is not yet a catastrophe. There may be an upturn in the sector - if people decide to rent cars instead of buying them.' (October 2001)


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