Tough times for car rental firms

Shortage of new cars is hitting rental firms hard and forcing a change in business plan

JOHN EVANS

In a dramatic change of fortunes, vehicle rental companies – once the darlings of a motor industry desperate to shift metal and boost registrations – are now being shunned by car makers grappling with production shortages and focused on more profitable business. Until the Covid pandemic struck in 2019, manufacturers and rental firms had been locked in a self-serving embrace: car makers supplied thousands of vehicles to rental companies at huge discounts, only for the rental firms to dispose of the cars at auction, often for a profit, just six months later, in the process distorting the used car market and weakening residual values. How things have changed. Now rental firms, anxious to replace the cars they sold off during Covid when there was no consumer demand, are at the…

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Autocar (Digital) - 1 Issue, August 3, 2022

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