25 May 2021

Restocking rental cars biggest barrier to sector's recovery - RVA

10:31 am on 25 May 2021

A shortage of new cars is holding back the rental vehicle industry from re-employing staff laid off due to the pandemic last year.

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Stock image. Photo: 123RF

Trouble restocking was the biggest barrier to the sector's recovery, said the Rental Vehicle Association (RVA).

Firms that slashed vehicle numbers last year, face growing wait times now.

"Availability of new vehicles for purchase by our industry has been significantly inhibited," the association vice president Kevin Walker said.

"That is probably what I would cite as the primary reason for the reduction... in purchases by our industry."

New car stocks countrywide are at a record low, with just a month's supply of popular models, and demand higher than before Covid. Households were now neck-and-neck with businesses buying new cars, when they normally made up just over a third of buyers, the Motor Industry Association said.

Rental car firms, meanwhile, have managed to snare just 2000 new cars so far this year, better than the 3000 through all of last year, but far below normal purchases of 20,000 annually.

"We're in a rebuilding and recovery phase, and the challenges associated with restocking our fleets are enormous," Walker said.

If companies could restock, they could re-employ more people.

"Yes, the two go hand-in-hand... both are equally challenging."

Uncertainty about how demand would pan out was adding to that stress, he said.

Rental Vehicle Association vice president Kevin Walker

Rental Vehicle Association vice president Kevin Walker Photo: SUPPLIED

The association has met with the government but did not expect a turnaround in car supply any time this year.

"The best industry response that we've been able to consider, where possible, is to hold vehicles that haven't been utilised so that they will assist availability when tourism demand improves."

Holding back on on-selling, and a rental fleet slashed from 60,000 pre-Covid to about 33,000 now, was drying up the numbers of ex-rentals for sale.

Usually, about 15,000 to 20,000 used rentals go up for sale, mostly around Easter each year.

"The volume of vehicles that our industry can feed to the used vehicle market moving forward will be in decline quite significantly," Walker said.

Transport Minister Michael Wood said the meeting with the association highlighted how the pandemic had had a major impact, and ongoing supply chain issues meant they were restricted in their ability to import cars.

"Officials are working with the freight industry to try and alleviate the issues as much as possible, but global factors continue to clog the international supply chain."

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