the Main reason for the sharp decline in demand for the services of a rental company lies in ending the outbreak COVID-19 international passenger air service. This has left in March, April and may a completely empty rack of car hire in the biggest airports in the world. Given the fact that the air in harbours around the world such services are generating 2/3 of their income, which occurred a collapse in the number of bookings led to a sharp decline in revenue. On the other hand, erupted in the United States and other countries epidemiological crisis was provoked by the imposition of quarantine or restrictions on movement of citizens. And such “internal” lockdown even more worsened the situation in the markets of the rental.
the Combination of these factors undermined the financial position of Hertz was founded in 1918 in Chicago and until recently a leading car rental office in USA with a 10-strong network of branches around the world. In the end, last Friday, its leaders sued the state of Delaware a petition for reorganization under Chapter 11 protection bankruptcy. It will affect the North American offices of the company and will not spread to Europe and the franchising structure.
this critical situation has led to the refusal of the leading operators of the us rental market from the purchase of new cars for the current update of their fleet. If in normal times in the U.S. market such purchases accounted for about 1.7 – 1.9 million cars annually, in the current situation, those numbers can be forgotten. So, the main competitor of the bankrupted car company Avis has announced a reduction in the volume of purchased cars from 80 percent.
moreover, found themselves out of business by a giant fleet of rental cars will soon go into a massive sale in order to cover the accumulated debts of the companies. According to experts, in the coming weeks on the American market supported machines will be exhibited around 1.5 million such unclaimed “iron horses”.
Moreover, the process of large-scale “drain” of these assets began in March, when Hertz sold 41 thousand of their cars in America and another 13 thousand in Europe. At the same time, Avis is also strongly reduced its idle fleet, having 35 thousand units.
In this situation, the only potentsialnye beneficiaries of the deplorable state of Affairs leading car rental services in the world are customers of supported cars. They can expect not only large discounts, amounting to 15 percent of the market value, and at zero down payment, and installment payments. At least, that’s the way things knocked down the US automotive market, according to the magazine Consumer Report.
In Russia, the situation is likely to go on analogues��term scenario. “The rental industry is one of the most affected by the pandemic coronavirus. Along with hoteliers and restaurateurs, we do not expect a quick recovery of our market and a sharp return to the previous volumes”, – told “RG” the representative of the Russian division of Hertz Vladimir Emelyanov. According to him, before the epidemic COVID-19 in Russia and the imposition of restrictions on the movement of citizens, the revenue of companies in the car rental from transactions with individuals ranged from 60 to 95 percent, and corporate clients occupied a much smaller share.
a General decline in incomes in the sector “RG’s” interlocutor was estimated at 80 percent, which has forced the vast majority of domestic companies, landlords cars to review their lease contracts and to cut imposed in January, the plans for procurement of new machines.
“Who and how to cope with the adverse situation depends on the financial models someone fleet was owned, and someone, and of about 90 percent, took cars on lease, and now this issue is very serious. Obviously, such contacts will have to be revised. And of course became unpopular in the current environment, rental cars will spill on the Russian market of used cars. It will happen,” – said Emelyanov.
However, the main challenge is waiting for the Russian industry of rental vehicles after the complete abolition of the pandemic COVID-19 quarantine. As explained by experts, the rapid development of modern and relatively cheap karteninhaber services greatly hindered the traditional rental firms before the current crisis. And a new wave of aggressive dumping in the struggle for postcoronary client will be able to survive not all.
