Last month Budget Car Rental joined Barloworld’s current car rental brand Avis Southern Africa when it took over the brand for Southern Africa. This agreement entrenches Avis as a market leader in the industry and places it in a position to leverage the two brands for better offerings to customers. Rainer Gottschick, Chief Executive for Avis Rent a Car southern Africa, gives some insight into the acquisition and how it will affect new and existing customers.
Q: What made the acquisition of Budget an appealing business opportunity for Avis?
A: Our principal, Avis Budget Group, globally owns both brands, so we are now aligned with our principal’s global strategy. This gives us the exciting opportunity to operate a dual brand strategy in southern Africa.
Q: How does the culture of Budget differ from the Avis culture, and has it been difficult to integrate the two?
A: We only acquired the brand in southern Africa, so no staff, facilities or fleet has changed hands. We’re not the first country to operate both brands together, so from a global point of view, although the two are distinctly different brands, they are well aligned and we don’t anticipate any problems in the southern African region.
Q: Which countries in southern Africa does this affect?
A: Under the license agreement, Barloworld will operate the Budget brand in Botswana, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe, as well as South Africa. Barloworld already operates the Avis brand in Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, South Africa, Swaziland, Zambia and Zimbabwe.
Q: Are there any plans to introduce either brand into new African markets? Which countries are being considered?
A: We already operate Avis in most African countries and will be exploring opportunities to roll out Budget in the markets where it is not currently represented. We continuously review our foot print in line with our customers’ requirements and demands.
Q: How will the two different brands be marketed?
A: The Avis brand will be positioned as a premium brand – an aspirational brand – while Budget will target younger clientele, positioned as the ‘fun, first experience’ type brand.
Q: Are you not concerned about confusion in the market place?
A: No, Budget is an established brand in the market, as is Avis. They each have a distinct corporate identity and appeal to different client groups, so it’s unlikely the public will confuse the two brands.
Q: How will this affect your fleet? Will you need to supplement it?
A: Avis’s current infrastructure, including the fleet, branch network and call centre, will be used to service Budget customers. There are no current plans to increase our fleet, but this may change in the future.
Q: Will we continue to see the Budget brand at South Africa’s airports?
A: For the moment, all kiosks – both at the airport and off site – will be dual branded, with dedicated counters for Budget customers. Ideally we would have liked separate kiosks at the airports, but there is limited space available. All car rental groups are tendering at the moment, and while we are aiming to be given more space at the airports, this is dependent on factors over which we have little or no control.
Q: Do you expect the entry of a new player in the market to affect the southern African business travel industry?
A: The entry of any new brand into an industry will, of course, have an effect on that industry as a whole, and we do not expect it to be any different here. Taking on the Budget brand gives us the opportunity to segment the market for different needs and position the Avis and Budget brands to optimally cater for each of those needs.
Q: What changes can Budget customers expect during the transition?
A: The Avis Budget Group is fully prepared to bring the Budget brand into the family and its customers will receive the exceptional service standards they receive anywhere else globally.
Q: What are you communicating to your Avis clients?
A: It’s business as usual. Avis will continue to try harder to exceed our customers’ expectations. Avis clients should experience no interruption in service or any drop in the quality of service or product that we aim to provide.
Q: What are the industry’s biggest challenges?
A: The car rental industry is a key part of the travel industry which, in the current tough economic climate, has seen no growth as an industry. The weakening of the rand has increased vehicle and parts pricing, putting further pressure on margins and customers should expect an increase in the per-day rental rate in the coming months.