When discussing the symbiotic nature of the new enterprise Mr Nelson said “I’ve been somewhat dismissive of car-sharing in the past, but what I’ve come to realise is that car-sharing.is complementary to our traditional car rental model.”Īvis’ traditional rivals Hertz and Enterprise have also been attracted to the increasingly popular car-sharing market in recent years. Accordingly, the two fleets of vehicles will complement one another during their respective peak times. In the case of new car-sharing schemes, the reverse is true. More traditional car rental schemes see a spike in utilisation during the working week which ordinarily tails off at the weekends. As city dwellers and students look to move away from expensive, traditional motor vehicle ownership, the daily or hourly rental schemes offered by car-sharing companies are becoming progressively more attractive.ĭuring a conference call to analysts, Mr Nelson stated that with the integration of Zipcar’s technology into their existing fleet of vehicles Avis can supplement the smaller Zipcar fleet in order to meet the high weekend demand of members. Avis chairman and chief executive Ronald Nelson stated that the acquisition of the company will “significantly increase our growth potential, both in the United States and internationally.”Įver increasing fuel prices and a greater demand for ‘greener’ transport schemes has led analysts to believe that the market, which is currently worth $400m a year, will be worth $10bn in the next few years. Recent results announced by Zipcar showed that its membership increased by 18 percent in Q3 and had risen by almost a fifth by the end of 2012.Ī number of recent acquisitions in the US and Europe has seen Zipcar become the world’s market leader in the car-sharing industry, controlling three-quarters of the US sector alone. In order to facilitate growth going forward, Avis intends to increase the number of markets in which Zipcar’s vehicles are located. Zipcar currently services around 767,000 members with operations in 20 cities across North America and Europe. Scott Griffiths will continue as Zipcar’s chairman and chief executive, and the company will continue with its planned move to new headquarters in Boston, Massachusetts. The deal is expected to be completed in spring 2013 and will see Zipcar operate as a subsidiary of Avis. The highly consolidated car-sharing industry saw another high profile acquisition in early January with Avis Budget Group Inc announcing it will buy Zipcar Inc for around $500m.Īvis’ cash offer of $12.25 per share represented a premium of 49 percent over Zipcar’s closing price on the last day of trading in 2012.
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