Gauteng Business News

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Motoring: Tempest Car Hire Keeps Rental Rates Low


Recent Gauteng Business News

With inflation spiking and interest rates going through the roof, low-cost vehicle rental specialist, Tempest Car Hire has some good news by keeping its price increases to the bare minimum. Taking lessons from Low Cost Airlines, the company is renewing its focus on providing high quality yet affordable car rental through tactical measures which include the disposal of its luxury fleet, the extension of the life of its existing fleet and exiting from its franchise agreement with a German car rental operator. Another key area is the focus on converting debtors to making use of lodge cards or credit cards as the method of payment for car rental services.

“We want to be the undisputed low cost car rental company in South Africa” says Tempest Car Hire CEO, Leslie Matthews.

He explains that the world over, low cost airlines have proven that most travelers are quite happy with an option that gets them where they want to go with minimum financial implications. “When travelling, companies and individuals just want a quality product at a great price. The ‘no frills no fuss’ concept is a winner” he says.

Explaining that around 80% of vehicles rented in this country are small to compact cars, Matthews says disposing of its luxury fleet supports this strategy. “We have found that luxury type vehicle rental patterns are seasonal, with the result that low utilisation of these vehicles in off peak periods negatively impacts the holding cost of our entire fleet and ultimately the price that clients pay for the most popular vehicle rental groups”. By reducing its fleet offerings from a range of 12 different categories to 6 categories but not limiting the ultimate fleet size, Tempest will focus on this “80%” market which it believes will improve its utilisation figures, translating into savings for customers.

He admits that the company has experienced some brand-creep, which he says is being sorted out. “We introduced luxury vehicles to our fleet as there was a perceived demand, but under the current economic conditions, we clearly see that customers are choosing primarily on price and brand” he says.

Where the car rental industry typically retains vehicles for 12 months before disposing of them into the used vehicle market, Matthews says Tempest is set to increase the holding period to 18 months. By adding 6 months to our to our asset utilisation, we are able to improve the depreciation of the asset without compromising on the quality as all scheduled preventative maintenance takes place on the fleet and in most cases motor plans are still in place. Matthews stresses that while price remains a key factor, quality and safety will not be compromised. We are confident that an 18 month-old properly maintained vehicle is every bit as good as a one year old car.

Another lesson which he says Tempest has learned from the low cost airlines is that of on line booking systems which reduce cost and improve convenience for the customer. As a pioneer in this field, Matthews says already 40% of vehicle reservations are done online. “In the immediate future we would like 50% of our total business to be channeled online and eventually in excess of 80%.”

“In effect we’re going back to our roots. We’re helping South Africans to keep costs low through delivering highly affordable, quality car rental to the market. We believe now is the perfect time to re launch our Brand” Matthews concludes.

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