Reduced demand due to international border closures resulted in rental car fleets seeing significant declines in 2020 as local companies rationalised their cost bases. In 2021, vehicle supply shortages, combined with dealer preferences for private sales over fleet sales due to higher margins, have resulted in heavily reduced rental car fleets compared to pre-COVID-19.
Hiring a campervan and travelling around the South Island is a favoured holiday activity of Asian and European tourists. While COVID-19 border closures have resulted in a significant increase in domestic tourism, this has not been enough to offset the decline in car rental value sales seen in 2020, driven by the lack of international tourists.
The New Zealand Government has ambitious targets for reducing the use of fossil fuels in New Zealand and has already announced a policy to convert the Government vehicle fleet toward electric vehicles by 2025, as well as an ambition to ban light petrol vehicles entering New Zealand by no later than 2035. As part of this strategy, the Energy Efficiency and Conservation Authority has a contestable fund designed to encourage uptake of electric vehicles, with one local operator – Go Rentals – receiving a NZD180,000 contribution towards the company’s investment in its electric vehicle fleet.
Prior to the onset of COVID-19 in New Zealand, car sharing services had started to grow in popularity. Car sharing services are unique in that, while they share the aspect of renting a car with traditional car rental, they are positioned to compete with ride sharing apps more than car rental.
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Car rental covers the short-term rental of passenger vehicles for self-drive including small vans by both business and leisure users, whether from the airport or downtown locations. Small vans up to one tonne are included. For longer than average rental periods, eg rental of one month, provided the rental is sourced from the short-term rental fleet, this transaction is included. Car rental value covers the price of car hire to the consumer. Ancillary revenues are included, such as the hire of baby car seats, GPS navigation systems, optional roadside assistance services and collision and damage waivers. Volume is provided by the number of car hire transactions, fleet size and number of car rental operators. In underdeveloped markets, car rental companies offer chauffeur-driven cars. Most people prefer these options, due to unfamiliarity with the roads. Euromonitor International includes chauffeur-driven cars in car rental, when they concern car rental companies such as Hertz or Avis, which offer a chauffeur-driven service as an additional option. Car rental covers sales to inbound tourists and domestic tourists. i.e. from a destination point of view (also known as point of supply). For example, if a US citizen books a car rental service in France via the US offices of Hertz, the sales are attributed to Hertz France. The same applies for online sales. Car rental excludes long-term leasing, commercial vehicles, trucks and motorbikes and local car sharing schemes.See All of Our Definitions
This report originates from Passport, our Car Rental research and analysis database.
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