Pretoria - Avis Southern Africa has acquired the franchise for the Budget Rent A Car brand in Scandinavia and plans to expand both brands in the region.
The rental and tourism company is part of the listed brand management group Barloworld. However, McCarthy Motor Holdings (MMH) has retained the Budget Rent A Car franchise for Southern Africa.
Brand Pretorius, MMH's chairman, confirmed MMH had many discussions with Avis over the future of the Budget franchise in Southern Africa and had reached agreement in principle with Avis plc on the retention of the Budget franchise.
"The agreement will be signed on December 9," he said.
The future of the Budget Rent A Car Southern Africa franchise held by MMH was thrown into doubt last year by Avis plc, Avis Southern Africa's franchisor, acquiring the worldwide rights to the Budget car rental brand.
The acquisition meant Avis was possibly in conflict with a restraint of trade clause in its licensing agreement with Avis Southern Africa.
Tony Phillips, Barloworld's chief executive, confirmed last week that Avis Southern Africa had obtained the Budget franchise for Scandinavia.
Avis Southern Africa acquired the Avis car rental operations in Norway and Sweden in 2000 for R300 million in cash.
Grenville Wilson, the newly appointed chief operating officer of Barloworld Motor, which includes the group's vehicle dealerships and car rental operations, said last week Avis had acquired the existing Budget franchise operations in Norway during the past six months.
Wilson said Avis planned to expand both brands "within the footprint where we operate". "There are lots of opportunities in the new expanded Barloworld Motor division. There is great common purpose and you'll see good stuff coming out in the short to medium term," he said.
Phillips said Barloworld was working on a plan with Avis to expand the Avis and Budget brands in Scandinavia in tandem.
He added Avis Southern Africa had been looking at where it could have both the Avis and Budget brands as there were some things in car hire done independently of the brand facing the customer, such as vehicle maintenance and billing, and cleaning and preparation of cars for hire.
Barloworld, which already had a 34.7 percent stake in Avis Southern Africa, acquired the car rental company in March, which led to the company being delisted from the JSE.