Fleet News

Makers limit daily rental cars

OVER the last three years when Spain's new car market has been booming, manufacturers have reduced their sales to daily rental car hire firms.

This contrasts with the period from 1993 to 1995, when some manufacturers increased their sales despite a depressed retail market.

Indeed, the managing director of one of these manufacturers even lost his job because significant numbers of the cars that he had sold in Spain to rental companies were resold in Germany.

Daily rental companies acquired 165,692 vehicles in Spain in 1999, representing 11.7% of the total market of 1,407,200 units.

While an important sector of the market, last year's daily rental sales were 5.3% below the record year of 1995, when 175,000 vehicles were sold to car hire companies.

Big firms such as Avis, Hertz and Europcar, each buy between 15,000 and 20,000 cars every year to meet the strong tourist demand.

But below these international operators' normal business are a large number of small companies that account for about 25% of the Spanish rental market.

Operating in the Canary Islands, Balearics and the Costa del Sol, their business interest is not only to rent out hire cars - offering cheaper fares than the market leaders such as Avis and Hertz - but also to sell those cars second-hand.

Most go to east European countries, but some end up in countries like Germany, that have higher used car prices than Spain.

Daily rental companies are exempt from Spain's registration tax that amounts to 12% of the list price of a car. Moreover, they benefit from better prices from manufactures than franchised dealers.

The only regulation they must carry out is to keep cars for at least four months from the date of sale, and charge VAT on the daily rental fares.

Back to figures for 1999; Renault, the total market leader, with 44,705 vehicles, sold the most cars to hire companies. SEAT came second with 19,437; followed by Ford with 19,345; Opel with 17,405; Citroën with 13,387; and Peugeot with 12,873. All the others brands delivered less than 10,000 units.

  • Sergio Piccione is deputy editor - motoring, of Spanish daily newspaper El Mundo. (May 2000)
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