Financial Meltdown Coming in the Car Rental Sector

Goldman Sachs and announced that its research indicates that the car rental industry sector is over-fleeted, meaning that the major car rental groups have way too many cars for the number of folks traveling these days. Many of the largest car rental chains are showing a ‘revenue per day’ challenge due to higher fuel prices and fewer travelers, even business travel is down sharply as companies sharpen their pencils, lay-off employees and cut travel costs.

There are also issues with depreciation and trade in values dropping for larger vehicles. When the car rental agencies hit 20,000 miles and sell those cars, no one wants them, especially the larger cars with the bigger engines, SUVs, pick-ups, cross-overs and mini-vans. Worse, analysts of the sector say that;

Business and commercial travel was slower going into summer and will continue to slow down further.”

Some expect more consolidation in the industry in the near future, as Airport car rental offices are hurting right now. And think about the major auto makers who sell lots of cars to car rental companies. This means fewer new cars will be sold, factories will go idle and more folks will lose their jobs. This is especially of concern to states like Michigan and Alabama, which are already worried about the economy.

Yes, the car rental industry has seen worse in the last couple of decades, but these are trying times and we may expect to see at least one major car rental company go BK in the next couple of quarters, perhaps along with a couple of airlines too. The travel industry has seen better days.

Next Post

The Perfect Place To Go Luxury Camping In 2015

Tue Sep 6 , 2022
Luxury camping tours are one of the hottest travel trends in 2015. Combining the best of both camping and a luxurious vacation, luxury camps are the perfect solution for discerning travellers who are looking for adventure without having to compromise on comfort. Glamping in India was almost unheard of a […]

You May Like