The car rental business of listed transport and mobility group Imperial Holdings is making a three-year, R100 million investment in the merger between Imperial Car Rental and EuropCar and a transition to a single car rental brand.
Dawn Nathan-Jones, the chief executive of EuropCar South Africa, the new name for the merged brands, said yesterday this investment would be spent on staff development, technology, information technology systems, process innovation, external communication and the transformation of company infrastructure. This would position it with the best car rental companies in the world.
Nathan-Jones added that the merger would result in reduced costs, while the opportunity to improve margins was great.
She said the merger was not done for these reason, but to give its customers greater global access and to reposition the company overseas.
EuropCar SA had 950 employees, which was 25 percent fewer than when it had the two brands, but there had been few retrenchments. People were redeployed and those who had left were not replaced.
She said the fleet operated by the company had reduced by 1 500 vehicles, but the car rental industry was typified by huge valleys and peaks and the same size fleet would now serve more customers.
EuropCar had had a market share in South Africa of about 6 percent. The merged business would have a 32 percent share, she added, making it one of the top two rental companies in the country.
Hubert Brody, the chief executive of Imperial Holdings, said the name change was a very important part of the evolution of the group, which was smaller than a few years ago, but more nimble and more appropriate in the current economic environment.
Imperial is now focused on its motor dealerships, logistics and tourism and car rental businesses.
In the past two years it has sold its aviation business, unbundled and separately listed its leasing business as Eqestra and it is no longer involved in earth moving equipment or open-cast mining.
Osman Arbee, the chairman of Imperial's car rental and tourism division, said Imperial Car Rental was focused on local leisure, local government and corporate business, while EuropCar concentrated on the inbound leisure market, and both businesses had reached a stage where it was time to put the two together.
Arbee said Imperial had an 11-year association with EuropCar. Imperial Car Rental had performed well in the local market over the past three decades, but its vision for future growth over the next decade made it necessary to have a globally unified image.
He said Imperial's car rental business would become a global player in name only, not in ownership, because EuropCar SA would continue to be 100 percent owned and managed by Imperial Holdings.