Chip scarcity will hold automobile rental costs excessive, Europcar chief warns

Rising automobile rental prices are anticipated to final till the minimize in auto business manufacturing attributable to the semiconductor scarcity is resolved, the Europcar boss warned.

Caroline Parot, managing director of the biggest publicly traded automobile rental firm in Europe, mentioned costs had elevated as a result of suppliers couldn’t supply sufficient autos to fulfill demand from vacationers.

Prices are two or 3 times greater than regular in lots of fashionable locations, based on shopper teams and value comparability websites. Rising automobile rental prices have helped push US inflation to its highest degree since 2008 final month.

“We won’t serve everybody as a result of there aren’t sufficient vehicles,” she informed the Monetary Occasions.

The chip disaster has resulted in a extreme scarcity of recent autos, with automakers prioritizing retail gross sales and different channels over rental automobile suppliers, who have a tendency to purchase wholesale at decrease costs.

“Individuals need to journey. If you happen to have a look at the USA, there are sufficient accommodations and sufficient flights, however the capability of the vehicles has modified, ”she mentioned.

Whereas many worldwide journeys to Europe are lowered, increasingly more individuals are touring inside their very own international locations.

Parot warned that the rental business, like a lot of the leisure and tourism business, has been additional hampered by authorities confusion over journey lanes, particularly sudden rule adjustments. and sudden.

Caroline Parot: “Persons are desirous to journey. If you happen to look in the USA, there are sufficient accommodations and sufficient flights, however the capability of the vehicles has modified ‘© AFP by way of Getty Photographs

“Each time a hallway is open bookings explode and we’re full inside 24 hours, but when it is canceled they’re all gone,” she mentioned, saying the principles that ruled a closure do not ‘had by no means been clearly defined.

“Coordination between nations might be what’s lacking essentially the most,” she added. “Every authorities reacts in a different way.

She added that the necessity to ship vehicles throughout borders in Europe at brief discover and at excessive charges had pushed up working prices, forcing costs even greater.

“If my prices go as much as serve the shopper, the shopper must pay for it, in any other case I am now not viable,” she mentioned.

The auto business would not know precisely when the chip disaster will finish, with most automakers now anticipating a disruption till 2022.

Parot mentioned she believes Easter subsequent 12 months can be “extra manageable,” though demand is anticipated to return.

The corporate doesn’t anticipate to achieve pre-pandemic demand ranges earlier than journey resumes between Europe, the USA and Asia, which the group plans for 2023, it mentioned. added.

Final 12 months, Europcar suffered a forty five% drop in demand, which nonetheless means greater than half of its typical enterprise was functioning, as metropolis dwellers turned to rental vehicles to entry autos. non-public in the course of the pandemic.

Earlier this 12 months, the corporate accomplished a monetary restructuring that worn out $ 1 billion in debt, however positioned a lot of the enterprise within the fingers of its lenders.

This 12 months’s income can be above 2020 ranges, however not near 2019 as a result of impression of the Delta variant, Parot mentioned.

Within the brief time period, the group has began shopping for vehicles from sellers and different channels in addition to its orders from conventional producers in an try to fill gaps in its community.

Nevertheless, many potential consumers are in search of accessible fashions and the worth of used vehicles has overtaken new autos in some segments.

Final month, the group turned down a € 2.2 billion takeover provide from Volkswagen.

Parot mentioned being owned by an automaker wouldn’t essentially facilitate automobile sourcing in the course of the present disaster, including that the corporate has been owned by producers twice in its historical past.

She declined to remark additional on the takeover provide.

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