The business prospects for the car rental industry during the World Cup remain uncertain. This follows the dramatic cut in estimates of the number of foreign visitors coming to the country for the soccer tournament and reports of corporate travel drying up because of expensive airline flights and accommodation for the duration of the tournament. Sales of new cars to rental companies in the first quarter increased by 89 percent from a year earlier to 9 407 units as rental companies increased the size of their fleets in preparation for the event. However, sales to the rental industry have tapered off sharply in the past two months.

Sales reported to the National Association of Automobile Manufacturers of SA peaked at 4 017 units in February, but were below 2 000 units in both April and May. Martin Laubscher, the chief executive of Barloworld Motor, which includes car rental company Avis, said yesterday that there was still a lot of uncertainty about the number of visitors coming to the country, but the group was nimble enough to react to whatever happened in the market. He said the company was comfortable with the level of vehicles it had committed itself to and it would be able to meet the vehicle utilisation rates it expected. Avis had defleeted late last year when used car values were still strong and renewed its fleet.

It had about 2000 more vehicles in its fleet than a year ago, but rental days and utilisation rates had remained static. Brand Pretorius, the executive chairman of McCarthy Motor Holdings, which includes Budget Rent a Car, said the challenge was to encourage the corporate market to travel during the tournament. Pretorius said Budget had started defleeting about six weeks ago and had reduced the size of its rental fleet by about 1 200 vehicles to about 7 800. Depending on corporate travel booking trends in the next few weeks, it might defleet a further 1 600 vehicles. Based on forward reservations, it had concluded that the extra capacity it had created for the event would not be needed.

Osman Arbee, the chief executive of the car rental and tourism division of Imperial Holdings, which includes EuropCar and Tempest, said it had slowed its defleeting and kept some cars for the World Cup. He said the defleeting process would start after July 15. He estimated between 5 000 and 6 000 vehicles could come onto the market from all the rental companies, but this would not flood the market.