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Mercedes' Easy solution

DaimlerChrysler has signed a fleet contract for 5,000 Mercedes-Benz A-class which, say many of its dealers privately, is too expensive to take off in the UK.

Stelios Haji-Ioannou, the EasyJet entrepreneur, has signed a lease deal to form a Europe-wide car rental group based primarily at airports used by his airline. Bookings for EasyRentaCar will be via the internet with prices from £9 a day.

Initially the first UK sites will be in Edinburgh, Luton and Stansted and the range of A-class will include A140, A160 and A170CDi. Eventually there will be 2,000 A-class for hire in the UK.

Mr Haji-Ioannou warned established hire companies like Avis, Budget and Hertz: “We are going to shake up this industry in the same way we have done with the airlines. There are major economies of scale to be had and the potential for the company is enormous. The agreement we have with Mercedes-Benz will confound those who thought we would use cheaper models.”

EasyRentaCar's order will account for up to 15% of the total production of A-class and DC has offered to buy back and renew the fleet, cutting EasyRentaCar's exposure to any potential losses on residuals.

“This agreement means we will not have any residual risk,” said Mr Haji-Ioannou.

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