29 Apr 20

How COVID-19 impacts car rental industry

The travel bans to stem the spread of Covid-19 have hit the rental-car industry harder than most. Will government assistance be enough to keep them afloat?

In the U.S., Avis, Hertz and Enterprise have asked the Treasury Department to include their industry in federal plans to rescue travel companies. On the other side of the Atlantic, France has underwritten loans worth 225 million euros requested by Europcar to maintain the continuity of its car rental business.

Concentrated market
The U.S. car rental industry is a relatively concentrated market, dominated by just three companies and their nine brands. Together, Enterprise (Enterprise, National and Alamo), Hertz (Hertz, Thrifty, Dollar, Firefly) and Avis (Avis and Budget) represent 94% of the market.

In Europe, the picture is a bit more diverse: the same three companies plus Europcar (including its Goldcar and InterRent brands) and Sixt represent 65% of the market. In 2019, the global car rental market generated a turnover of around 90 billion dollars. Analysts were very optimistic about the coming years, expecting strong growth based on new mobility trends. How everything has changed now!

Capitalisation of public companies:

  Europcar Hertz Avis
  euros dollars dollars
Capitalisation 24 April (million) 244 528 909
PER 8.82 - 3.29
Max 2020 4.27 20.29 50.34
Share value 24 April 1.58 3.42 13.08
% loss of share value 63% 83% 74%


Travel restrictions have contributed to an 80% plunge in revenue in April, Avis says. The company now plans to $2 billion in costs this year. Moody’s downgraded Avis by two notches to B2, citing Avis’ weakening liquidity due to the pandemic, with additional pressure due to reduced used-car prices. Avis stock has already plunged 74% this year. The company is also reducing compensation for executives and senior employees, pausing capital spending and curbing the expansion of its vehicle fleet.

Hertz Global Holdings Inc. brought in restructuring advisers to rework the debt and avoid filing for Chapter 11 bankruptcy. The rental-car company’s shares are down 83% this year. With cancellations soaring and new bookings scarce, the company has been consolidating locations, cutting staff (10,000 redundancies) and reducing capital spending to preserve liquidity. However, more pressure will come from weak used-car prices.

With net debt increased by 32% compared to last year, Europcar shares have lost 63% of their value on the stock exchange. The French state has intervened, underwriting loans worth 225 million euros requested by the car rental company to maintain the continuity of its business. Europcar had increased its size in recent years through acquisitions based on concepts such as new mobility, which at the moment only generate losses. That acquisition policy has generated an enormous goodwill of 1.2 billion euros.



Author: Pascal Serres, Global Fleet Expert and CEO of Moby-D
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Authored by: Pascal Serres