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The Car Rental Industry Updated Report Available
BY Brenda Young
South Africa
08 June 2015
R 2 040.00 (ZAR)  
estimated $ 134.18 (USD) *
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South African Car Rental Industry


This report focuses on the South African car rental industry which grew revenue by 5% to R4.89bn in 2014. The members of the South African Vehicle Renting and Leasing Association (SAVRALA), who account for 90% of the sector, have a combined fleet of 63,000 vehicles and employ approximately 6,000 people.


Current Conditions


Competition among the industry’s three main players, global brands Avis, Europcar and Budget, is intense and although in the past this resulted in low rental prices, analysts predict that rates will increase. Companies are under pressure from shareholders, who want a better return on investment, and operating costs have risen, due in part to the weakness of the Rand and the increase in interest rates. As one of the factors driving historical industry growth is the increase in tourism, there are concerns that the number of international tourists will decrease considerably because of the amended Immigration Act, which is applicable from 1 June 2015.


Future Growth


Locally and in the rest of Africa the shuttle and chauffeur drive side of the car rental industry is seeing particularly strong growth. Internationally, emerging trends such as car-sharing, car clubs and ride-sharing have had an effect on the car rental market, particularly in city areas, as they provide alternatives to traditional car rentals. Services such as Uber, FlightCar and Zipcar, which was acquired by the Avis Budget Group for US$500m in 2013, can be booked easily and quickly on the internet.


Report Coverage


This report describes the current situation in the country, emerging trends within the industry and factors influencing the sector’s success. The report also profiles six of the major car rental companies, including Avis Rent A Car and Budget Rent A Car, subsidiaries of Barloworld South Africa (Pty) Ltd, a multinational company that operates in 24 countries and generates R62bn in annual revenue.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 4
4. STATE OF THE INDUSTRY 9
4.1. Local 9
4.1.1. Corporate Actions 11
4.1.2. Regulations 11
4.1.3. Enterprise Development and Social Economic Development 13
4.2. Continental 14
4.3. International 15
5. INFLUENCING FACTORS 16
5.1. Economic Environment 16
5.2. Rising Input Costs 17
5.3. Labour 17
5.4. Cyclicality 19
5.5. Crime and Road Safety 20
5.6. Environmental Concerns 20
6. COMPETITION 21
6.1. Barriers to Entry 22
6.2. Substitutions for Traditional Car Rental 22
6.3. Innovation 23
6.4. Technology 24
7. SWOT ANALYSIS 25
8. OUTLOOK 26
9. INDUSTRY ASSOCIATIONS 26
10. REFERENCES 26
10.1. Publications 26
10.2. Websites 27
APPENDIX 1 28
SAVRALA Rental Members 28
SAVRALA Leasing Members 29
SAVRALA Associate Members 29
SAVRALA Partners 30
SAVRALA OEMs 30
ORGANOGRAM 33
COMPANY PROFILES 34
BARLOWORLD SOUTH AFRICA (PTY) LTD 34
BIDVEST CAR RENTAL (PTY) LTD 40
CAR HIRE BROKERS (PTY) LTD 42
CMH CAR HIRE (PTY) LTD 44
GAGE CAR RENTAL (PTY) LTD 47
IMPERIAL VEHICLES (DIVISION OF IMPERIAL GROUP LTD) 49
SPRINGS CAR WHOLESALERS (PTY) LTD 57
UNITRANS AUTOMOTIVE (PTY) LTD 60