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22 mar 19

Understanding car rental in Australia and New Zealand

Rental cars in Australia and New Zealand remain an important tool in the fleet manager’s toolbox and the major players are already adapting for a mobility future. Globally the industry remains a major player accounting for around US$27 Billion dollars in revenue during 2019 and with 3.5% CAGR forecast for the next five years shows no sign of diminishing. The A/NZ story is not quite as optimistic with forecasts near flat at just under 1% and the local players are looking at innovation to carve out a bigger slice of the pie.

Who are the players?

The four largest rental car businesses in the region are Avis, Europcar, Hertz and Thrifty (see table) with Hertz being the largest of these. The big players are supplemented by a range of independents, most notably Bayswater Car Rental (also known as “No Birds”) and Redspot car rental. While all four are working on continued development of their rental car offerings, there is also a strong push toward newer mobility offerings. Hertz for example operates the car share business Flexicar, one of the largest in Australia and all providers offering smartphone apps that allow bookings to be made in real time.

Company

Brands

Coverage

Number Vehicles - Australia & NZ

Number vehicles - Total

Number Locations - Australia

Number Locations - New Zealand

Number Locations Total

Avis

Avis, Budget, Zipcar, APEX

A/NZ

25000

25000

260

38

298

Europcar

Europcar, Keddy

A/NZ

20000

20000

240

22

262

Hertz

Hertz, Ace, Flexicar

A/NZ

30000

30000

300

44

344

Thrifty

 

A/NZ

17000

17000

200

28

228

 

 

Avis leads the way

Avis believes that rental car businesses have strategic advantages in the delivery of mobility and have said that they are “not … afraid to embrace the opportunity to lead the way in shaping the future of mobility.” Avis operates over 100,000 connected vehicles worldwide and are “committed to a fully connected global fleet by 2020”. A spokesman for AVIS also highlighted that their Zipcar operation, while not yet available in Australia and New Zealand, is the world’s leading car sharing network and the recent launch of the Avis Mobility Lab in Kansas City positions the company to collaborate with municipalities around the globe as they move forward with Smart City initiatives.

Manufacturers and Fleet Managers

Along with the dedicated car rental businesses already discussed, several manufacturers are eyeing the rental market as a gateway to mobility. One source I spoke to told me that he was aware of at least 6 global manufacturers that are actively working toward launch of car rental or sharing in Australia or New Zealand as an initial foray into local mobility. Fleet lessors too are working toward enhanced rental offerings. Most already provide ‘relief’ vehicles in the event of breakdown or accident and will generally source these from one of the big four rental cars agencies. There is increasing interest though in the establishment of their own fleet.

ORIX – the pioneer in Australia

One of Australia’s largest and oldest fleet lessors, ORIX, is also the largest provider of in-house short term rentals with a fleet that varies from around 1000 – 1200 vehicles nationwide. Willem Kennedy, General Manager Operations, says that “the shared economy is becoming more important, but we also have to consider the unique challenges that are faced in Australia and New Zealand. We’re still very much a suburban population and car share that focusses purely on inner city, high density won’t work for everyone; an adaptable and evolving solution is needed.”

Kennedy also notes Orix’s considerable expertise in heavy vehicles. “ORIX has always been much more active in this area than many of our competitors. We operate a large scale Commercial & Light Commercial rental business and that operates in tandem with the traditional Fleet business. We’re seeing growing short-term-rental demand for both passenger and light commercial vehicles and we’re uniquely placed to supply that demand on a national scale.”

The Future is Bright

There is little doubt that the car rental industry has a big role to play in the future of fleet. In many ways the whole concept of mobility could be said to have started with the idea of car rental. While there is a great deal of upheaval yet to come, it is perhaps those that are already in this space that will be best placed to take advantage.

Article authored by Shane Curran

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