ALREADY congested,
the car hire landscape
is being watched
closely following the entry
of a new player but so far
the changeover has been
relatively smooth.
The change sees
Barloworld, which holds the
licence for Avis Southern
Africa, taking over the Budget
brand. The company now
operates the two brands,
following an approach
adopted internationally.
Meanwhile Bidvest, which
already owned the fleet
operated under the Budget
name, launched Bidvest Car
Rental.
The two Avis brands will
now be marketed and
positioned separately,
with Avis positioned as
a premium aspirational
brand, while Budget, as
a “fun, first experience
brand” targets younger
consumers, says Lance
Smith, executive: sales at
Avis. The brands will also
be sold separately, although
they share a common fleet,
operations and head office
support. “The South African
operation has sufficient fleet
to service the needs of its
Avis customers and growing
demand from new Budget
customers,” Lance says.
Meanwhile, as a new
entrant into the already
congested car-hire landscape,
Bidvest Car Rental is being
closely watched. So far,
the changeover has been
relatively smooth. “While
we anticipated a 5% market
risk associated with the
brand name change in the
short term, the risk has
been far lower to date,”
says md, Paulette McGhee.
“Challenges have been
caused mainly by system
booking interfaces, which
we are working to improve.
Business volumes should be
back to normal far quicker
than we envisaged.”
Paulette says the Bidvest
Group’s reputation as a
reliable, well-established
entity paved the way for
local acceptance of the new
car-hire brand. Competitors
agree and expect little
initial effect on their slice
of the pie. Fiona Angelico,
marketing and sales manager
of Thrifty Car Rental, says
the Bidvest brand is trusted
among local customers who
are likely to remain loyal.
Lance also anticipates little
change to the market shares
held by the main players in
the short term, with Bidvest
Car Rental expected to
retain a large portion of the
business it enjoyed while
running the Budget brand.
Having gone through a
similar process in 2008,
when it relinquished two
international brands (Global
National and Alamo) to
create a wholly South Africanowned
brand, First Car
Rental believes Bidvest Car
Rental has made an effective
switch. Melissa Storey,
executive head: strategy,
development and marketing,
says: “I think Bidvest’s quick
adaptation to signage and
above-the-line advertising
efforts are admirable
considering the footprint
affected and the timeframe
available in which they had
to turn things around.” But
she qualifies this, pointing
out that general consumers
not exposed to travel
industry channels
might perceive
Budget Car Rental
as a new player in
the short to medium
term.
Martin Lydall, chief
commercial officer
of Europcar, says it
will be interesting
to see how many
Budget customers
bought into the brand
(as opposed to the
company that held
the licence) and will
thus migrate to the
new operators.
Mohamed Owais Suleman, md of
the Woodford Group, says Bidvest
should not be regarded as a new
player as it has retained the same
management team and has held on
to its corporate domestic accounts.
The international market could be
the trial for Bidvest. Fiona believes
the inbound market may shift its
support to brands that are better
known internationally. Meanwhile,
Melissa says “the challenge is,
firstly, that the brand is unfamiliar to
international travellers”. “Added to
this, the Budget brand will still exist.
Traffic will not likely go to Bidvest
unless it has created an incentive for
the browser to commit
to an unknown brand.
I can only hope
that Bidvest is still
responsible in its
pricing efforts, so that
our industry doesn’t
lose all the positive,
much-needed yield
gains made in the
past two years.”
Lance believes that,
as the market slowly
re-aligns, Budget’s
strong international
reputation will
re-establish itself at
the expense of other
brands.
Paulette says, besides IT
system changes and interfaces,
the company’s only substantial
investment in its re-launch has
been in the marketing budget.
Fears that uncertainty would
affect staff acceptance of the
changeover were unfounded, and
the existing management team
remain in place. “Behind the scenes,
there was a lot that needed to
happen in a short space of time.
We effectively had three months
to prepare and we hit the ground
running with only one focus: to
ensure a seamless transition for
our customers.
Insurance: Which way to go?
“CAR-RENTAL service
providers do not provide
insurance; we sell waivers
that lessen the renter’s risk in
the event of accident damage
or theft,” explains Europcar’s
Martin Lydall.
Generally, ‘standard’ and
‘super’ waiver options are
offered for damage and
theft. With super waivers
the daily cost is higher but,
in the event of damage,
theft and loss, the liability
amount payable is lower than
that of a standard waiver.
“The difference between the
standard and super excess is
considerable and could easily
consume the saving made by
choosing the lower daily rate,”
says Martin.
“Corporate customers have
mixed needs when it comes
to waivers,” says Fiona
Angelico of Thrifty Car Rental.
“Their decisions are governed
by their own insurance cover.
If it includes car rental they
will opt for rates excluding
waivers. If their company
insurance does not include
car rental, they often opt
for a standard waiver with a
high excess, as this rate is
cheaper than the super cover,
where the excess is much
lower.” In contrast, Lance
Smith says Avis’s experience
is that most corporates
without car-rental cover go
for the super waiver product,
which means they require
the lowest liability exposure
available.
But which one is more
economical? Anthony
Courtenay, ceo of the Ivory
Group, which owns SATIB
Insurance Brokers, said: “In
most instances, if a company
has a number of staff
travelling during the course
of the year, it would generally
be more cost effective to
have the hire cars covered by
their own company policy, as
opposed to taking the car hire
company waiver each time.”
This would also afford
corporates an opportunity
to set the cover terms
and conditions with their
own insurers, rather than
accepting the waiver terms
and conditions offered by
the car hire companies.
“This allows companies to
negotiate a more robust,
comprehensive insurance
cover with an excess
structure to suit their
appetite for risk,” Anthony
says. Further, the existing
relationship between the
corporate and its insurers
can be of benefit when
claims and claims service
come into play.
According to Anthony,
some of the key points in
arranging car-hire cover with
the company insurers, which
are agreeable to car hire
partners, include:
Disclosing the corporate’s
preferences for vehicle
suppliers and the relevant
rights and interests of all
parties;
Stating the estimated hire
days for a given annual
period;
Stipulating the maximum
sum insured or maximum
value of class of hire
vehicle;
Affirming territorial limits
where car hire may take
place, as insurers may not
provide insurance cover for
hire cars outside SA;
Clarifying the terms and
conditions the insurers
place on the cover, such
as limitations on cover if
the vehicle is being used
in certain areas or for
certain uses;
Stating the excess structure
that applies to the cover
(e.g. higher excess for
younger drivers).
Photocap: First Car Rental adds
Honda Brios to fleet
First Car Rental has added 50 Honda Brios to its Group A fleet.
Described as Honda’s latest ‘city car’, the Honda Brio 1.2 Comfort is
a five-door sedan featuring electric windows, air-conditioning and
power-steering as well as USB/aux connectivity for the audio system
and steering wheel radio controls. Safety features include dual front
airbags, ABS and electronic brake distribution. Pictured here is First
Car Rental’s Sarah Scholefield.
New models on offer..
First Car Rental recently added three
new models to its fleet. They include
100 Toyota Etios 1.5 XS sedans to
Group C; 50 Honda Brio 1.2 auto
sedans in Group D and 15 Honda
Mobilio 1.5 Comfort 7-seaters to
Group I.
Europcar now offers Nissan’s new
X-Trail 2.0 and the new Qashqai
1.5 Diesel in Group S. These
are available at major airport
locations with most units located in
Johannesburg and some in the Cape
and KwaZulu Natal.
With the recent launch of the
Woodford Chrysler Big promotion, the
Woodford Group – which considers
itself South Africa’s market leader
in super luxury vehicle hire – has
made luxury car rental more widely
affordable. Under the slogan ‘all the
perks without the pricetag’, Woodford
is offering a Grand Jeep Cherokee or
Chrysler Grand Voyager at
R1 399 a day with 100km free daily.
This is perhaps 40% cheaper than
rates offered by other car-rental
companies, says Mohamed Owais
Suleman.The group recently upgraded
its website with a refreshed look
and has improved booking time, now
down to under a minute.
Industry responds to e-toll
developments
DEPUTY President Cyril
Ramaphosa’s announcement
that e-tolls are here to stay but
that costs will be reduced, has
met with mixed reaction from the
car-rental industry. “Further to
last week’s e-toll announcement,
Savrala awaits the various
anticipated related Gazettes
due in the forthcoming months,
which will outline in detail the
proposed changes,” said Marc
Corcoran, president of the
Southern African Vehicle Rental
and Leasing Association (Savrala).
“The management of e-tags is a
considerable administrative burden
for our industry and so any relief
offered – by being able to register
by vehicle details only – would be
welcome. However, the devil is in
the detail.
“In addition, we remain of the
view that the current e-toll funding
model remains sub-optimal and
that allocations from the fuel levy
would be a more efficient funding
model,” Marc concluded.
