Rental car shortage crisis: How COVID forced industry to sell fleets to survive

There's a serious shortage of stock in the system because of the knock-on effects of the global COVID-19 pandemic and the lockdowns South Africa has lived through.

FILE: As COVID-19 lockdowns dragged on, car rental companies were faced with a difficult choice hold on to their fleets as they sat idle or sell them off to stay afloat. Picture: Jay Lamping/Pixabay.com

CAPE TOWN - If you're planning to hire a car in the near future, best you book it as soon as possible.

There's a serious shortage of stock in the system because of the knock-on effects of the global COVID-19 pandemic and the lockdowns South Africa has lived through.

As COVID-19 lockdowns dragged on, car rental companies were faced with a difficult choice hold on to their fleets as they sat idle or sell them off to stay afloat.

Chairman of the Southern African Vehicle Rental and Leasing Association and CEO of the Pace Auto Group Grenville Salmon said most companies chose to downscale.

“In July, the car rental fleet dropped by about 35,000 nationally and generally in previous years, in the peak season, there’s about 80,000 rental cars available.”

So, as life begins to normalise under lockdown level 1 and with Christmas holiday season approaching, the industry has 50,000 fewer cars than it had last year.

Salmon said there was now a huge demand for rental cars, but the problem was that there was no supply.

“In order for us to up-fleet, orders that were made six months ago are still not delivered and some manufacturers have just gone the route of cancelling the orders.”

He has advised South Africans planning to hire a car in the near future to book as soon as possible.

“There is a massive shortage, I can only recommend people book their car rental now for December.”

As demand grows, Salmon said companies were struggling to add more vehicles to their fleet.

“For instance, Polo Vivo is produced in South Africa and with [if they record a] COVID case, they will shut down for a shift and everyone must leave the factory. So, you lose one third of your day’s production and that might happen three or four times in a month.”

That supply crunch is also thanks to the pandemic but it's a global problem because of the worldwide shortage of a semiconductor chip.

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Stocks have been depleted due to production facilities being shut down during the pandemic and without those chips, car manufacturers can't scale their production up.

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