News

Car rental companies shift to foreign made, cheaper fleets

August 11th, 2009 Written by Amelia OGDEN

Car Hire companies in the US are adding more foreign manufactured cars to their fleets than ever before.

In the past six months, 48.8% of cars to become part of rental fleets were produced by Ford, Chrysler or General Motors, compared with almost two-third at the same time last year, according to Automotive Fleet magazine.

About 8 in 10 vehicles sold to rental companies came from local manufacturers, but now the big three rental companies, Avis, Hertz and Dollar Thrifty are increasingly adding foreign names like Hyundai, Kia, Toyota and Nissan to their fleets.

This change shows how the domestic automakers are losing to their foreign competitors, and how car rental companies are tightening their belts and dealing with slimmer profits as the travel industry is by the recession.

Rental companies want to keep customers happy rather than provide the cheapest option, and they also want vehicles that can hold their value for the longest.

“It’s amazing how things turn around,” car-rental industry consultant Neil Abrams said. “It used to be you’d never see foreign cars in fleets, but the companies re-examined their businesses and decided to embrace non-U.S. brands.”

The major car rental companies in the US were once controlled by the automakers, with all having spun off as independent companies, but recently have found themselves diversifying to several brands of cars for hire.

“For some models, we’d find ourselves selling 50 percent to 60 percent of our production into rental,” George Pipas, chief sales analyst at Ford, said.

Consumers are also playing a significant role into the shift of focus.

Drivers are now choosing to buy imports over American cars, so it’s not surprising that rental companies follow these trends, said Mark Norman, president and chief operating officer of Zipcar.

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