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Threat to dealers from PHH/Arval fleet venture

Dealer-based contract hire and rental companies are likely to be forced out of the industry by newly created multi-national giants, said David Rendell, Lloyds UDT car and fleet director.

His warning comes as a £600m joint venture between Avis Group and French bank BNP Paribas was announced to create Europe's largest fleet management and leasing company.

The new company will merge PHH Vehicle Management Services with Arval, the Paribas contract hire subsidiary which last year bought Ryland Multifleet. It will have 545,000 vehicles under management or lease in Europe including 380,000 in the UK. It will also run more than 450,000 vehicles in north America.

Rendell said consolidation in the contract hire and rental industry would put dealer-based operations at risk as margins were cut and increased volumes are needed to cover operating costs.

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