Fleet News

Pressure on daily rental margins

SEVERAL negative factors have placed severe pressure on daily rental margins in France this year.

The start of the officially imposed 35-hour week has increased labour costs, while the end of 'duty free' has seen airports try to recoup their shortfall in income by raising fees for on-site rental locations.

Alain Tuil, Hertz franchise director for France and French Africa, said profit margins had been further squeezed by manufacturers increasing the cost of buy-back supply arrangements.

He added that changes in the way daily rental companies registered their vehicles had also driven up administrative costs.

Previously, French car hire firms have registered all their vehicles in the 51st Departement (state) that had established sophisticated processes to cope with the procedure. Now, rental companies must register vehicles in the Departement where the vehicles will be used, placing new administrative pressures on registration bureaus unaccustomed to such high demand. (May 2000)

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