The recession has hit the rental market as hard as it’s hitting car makers and leasing firms. BusinessCar talks to several big brands to see how it is affecting their business and how they’re shaping up for the rest of 2009
Hertz – Neil Cunningham, UK general manager
What will happen to the cost of daily rental in 2009?
Rental prices always fluctuate depending upon market demand. Cost will clearly be a key differentiator as we look ahead to 2009 and beyond.
By what green criteria can fleets book vehicles?
Customers can take advantage of the Hertz Green Collection, which gives them access to a range of fuel-efficient, environmentally friendly vehicles. Cars from the Green Collection offer a weighted CO2 output level of less than 140g/km, making them more environmentally friendly than most other cars. This weighted CO2 level is already below the 2008 voluntary levels set by the EU for the European Automobile Manufacturers Association.
What will be your key new development in the next 6-12 months?
Hertz’s newly launched global car share service ‘Connect by Hertz’ will certainly be in the spotlight over the next six to 12 months. Having already been launched in New York, London and Paris, the service has ambitious plans to expand within countries and into new territories in the near future with unique features such as the reciprocity of the service (allowing members in one city to access Hertz’s car sharing service in other countries) due later this year.
What impact has the recession had upon fleet’s focus on risk management?
There is a clear downsizing trend in customer demand for more cost- and fuel-efficient vehicles, which has seen risk management drop back from being the prime focus as cost issues ride higher up the agenda.
What is your key message for 2009?
We are seeing the concept of car sharing starting to gather pace and importance.
Nexus Vehicle Rental – Neil McCrossan, CEO
What will happen to the cost of daily rental in 2009?
I think pricing is going to be very fluid over the next few months. In particular I think we will see increases in prices for the shortest rentals – 1-2 days – which I think is completely justifiable. Clearly there is pressure to be competitive, but this can’t be at the cost of sustainability.
By what green criteria can fleets book vehicles?
Nexus was the first rental provider to identify that being able to select by CO2 emissions was crucial for businesses. We are therefore pleased to see that this requirement is now being increasingly recognised by rental operators.
What will be your key new development in the next 6-12 months?
Our goal is to continue to make the process of buying and selling vehicle rental as streamlined as possible – through IRIS – enabling all users and sellers of daily rental to cut cost whilst enhancing customer service. Providing expert consultancy support is also a key development, complementing the in-house knowledge and resources of rental suppliers and users.
What impact has the recession had upon fleet’s focus on risk management?
I think these issues have moved down the agenda as the everyday pressures of doing business in the current climate have mounted. But managing risk is still hugely important and should not be pushed aside for another day.
What is your key message for 2009?
More than 40% of the year has already gone and life goes on. It’s harder but companies still need to do business and for that their people need to travel.
Northgate Vehicle Hire – Phil Moorhouse, managing director
What will happen to the cost of daily rental in 2009?
A general trend is emerging that rental prices will rise during 2009. Price increases will undoubtedly vary from company-to-company but could be of the order of up to 10%. Northgate has yet to make a decision regarding timings of any proposed price increases.
By what green criteria can fleets book vehicles?
Northgate does not have a specific ‘green’ price list, but we offer advice on fuel efficiency and CO2 emissions. In addition, we have added Eco-Start-equipped Mercedes-Benz Sprinter vehicles to our fleet. We also offer Vehicle Monitoring, a telematics system that helps fleets improve efficiency.
What will be your key new development in the next 6-12 months?
Northgate will not disclose new initiatives ahead of their launch date.
What impact has the recession had upon fleet’s focus on risk management?
Cost management has become the number one focus for fleets as the economic downturn has deepened. While that has led to a shift away from a focus on risk management, it is vital that fleet decision-makers recognise that accidents are one of the most significant factors that impact on costs.
What is your key message for 2009?
In times of uncertainty companies should consider rental over contract hire and ownership as the most efficient and effective fleet funding route. Companies should acknowledge that it is vehicle usership and not ownership that is key to retaining control of their costs.
Sixt Rent a Car UK – Ian Lawrence, managing director
What will happen to the cost of daily rental in 2009?
All rental companies in the industry are aware that rates have to increase, and slowly but surely this is happening. However, in a market where supply still exceeds demand, it is often difficult to convince customers that rates need to rise in order for them to continue enjoying what is still a truly excellent value-for-money service and product. To succeed in the current market, the ratio levels of corporate and retail business are critical to achieve a positive average revenue per rental and consistent cash flow.
By what green criteria can fleets book vehicles?
Sixt operates low-emission diesel and petrol cars in all categories.
What will be your key new development in the next 6-12 months?
Sixt has a number of new corporate locations opening in London along with the continued expansion of our new Sixt flexi-rent product, which offers a flexible fleet solution for small to medium-sized businesses.
What impact has the recession had upon fleet’s focus on risk management?
Sixt is concentrating on vehicle acquisition with minimal risk as buy-back options become more limited. You have to look at your target audience, what their needs are and what the best options are in terms of holding costs. The change in capital allowances has put more pressure on fleet departments to get the numbers right.
What is your key message for 2009?
Simply – cautious growth. Keep a lid on costs and if necessary operate fewer vehicles servicing better quality business.