The car rental industry in South Africa is facing some uncertainty over the next month as predictions over the number of foreign travellers entering the country for the World Cup are dramatically cut. Some industry experts are also saying that elevated room rates and flight prices are keeping the business traveller away.
In the first quarter, car hire companies grew their fleets in anticipation of heightened demand during the tournament. Year on sales of new vehicles rose by 89 per cent during the period. However, over the last two months rental firms have cut back on purchasing new cars because of a shortfall in the predicted number of visitors.
In February, the National Association of Automobile Manufacturers of South Africa recorded sales of 4,017 units. Through April and May this figure fell to below 2,000. Chief executive of Barloworld Motor, Martin Laubscher, said that the group was confident that it could react to whatever happened in the market, even though the number of visitors to South Africa for the World Cup tournament had become uncertain.
The Barloworld group includes rental giants Avis, which took advantage of strong used car values at the end of last year to renew much of its fleet.
Although 2,000 vehicles have been added to the Avis fleet, figures for rental days have remained static. McCarthy Motor Holdings, which manages the Budget brand, said that the key was to encourage corporate travellers to the tournament. Six weeks ago Budget reduced the number of vehicles in its fleet by around 1,200 and said that it might defleet further depending on demand.
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