Avis Budget to Double Budget Rental Locations in Germany - Analyst Blog

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Consistent with the goal of expanding its global presence, Budget Car Rental - a unit of Avis Budget Group Inc. ( CAR ) - has swarmed the German rental services market by opening 100 new car rental locations since April this year. Moreover, the company plans to open another 50 locations next month which will bring the company's total number of rental facilities to 300 in the country.

The company revealed that the new Budget rental locations will be operated by the licensees of Avis Car Rental. Currently Avis Budget serves value-conscious business and leisure travelers at most of the country's airports and at convenient locations in the metropolitan areas. But now, the company has authorized licensees to provide Budget rental services at particular local-market areas in Germany.

Budget brand's lack of strong positioning in Europe compelled Avis to expand its presence in Germany by this magnitude. Moreover, the company is now focused on expanding its network in the Europe, Middle East and Africa (EMEA) belt to better serve leisure travelers seeking value.

The expansion of its footprint in Germany is expected to boost the company's bookings as well as drive sustained, profitable growth across the EMEA region. Earlier in late 2012, the company tripled its rental locations in Spain in order to strengthen its Budget services across Europe.

Budget Car Rental is a globally recognized car rental brand serving more than 3,350 locations in over 120 countries. Under the brand, Avis Budget operates as an industry leading vehicle rental service provider targeting value-conscious travelers. The brand also operates the second-largest truck rental business in the United States, through a network of nearly 1,650 locations.

We believe that the recent strategic move will facilitate Avis Budget to enhance the Budget brand loyalty by better utilizing the licensee's established presence which will ultimately boost its top line.

Carrying a Zacks Rank #1 (Strong Buy), Avis Budget is a leading vehicle rental company in North America, Australia and New Zealand. Moreover, a formidable network of more than 10,000 rental locations and 350,000 vehicles enables the company to strengthen its well-established position in a highly competitive vehicle rental industry.

Avis Budget follows a core global strategy of collaborating with leading travel brands to expand its customer reach while creating additional demand. In Mar 2013, Avis Budget successfully completed the acquisition of the world's leading car sharing network company, Zipcar Inc. The move enabled the company to extend its offerings from car rental to car sharing, thereby helping it to compete with peers like United Rentals Inc. ( URI ), Hertz Global Holdings Inc. ( HTZ ) and Ryder System Inc. ( R ).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: R , CAR , HTZ , URI

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