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Rental shortage spells hire opportunity for dealers

The current shortage in daily rental provision is providing a window of opportunity for franchise dealers to move into short term hire, believes motor industry consultancy Network Automotive.

The company says that offering the service will potentially provide dealers with a new revenue stream along with a supply of used stock and the ability to offer customers extended vehicle trials.

Colin Bruder, Network Automotive managing director, said: "The rental sector has undoubtedly had a tough couple of years but business from both fleet and retail customers is gradually picking up, leading to an ongoing shortage in rental provision that is likely to last into the medium term future.

"This does provide a window of opportunity for dealers to move into the daily rental market. Dealer based rental is something that has contracted considerably during the recession but our feeling is that this could now be the time for dealers to reconsider. After all, rental can provide a very worthwhile revenue stream."

Bruder said franchise dealers had strong foundations for a good daily rental business already in place - a ready-made potential customer base, the credibility of being attached to a manufacturer, convenient premises, and facilities for storing and cleaning cars – but that a determined approach was needed.

He said: "Where many dealers go wrong is that they think a daily rental business can be just to boost utilisation of their existing courtesy car fleet. This never works because the needs of the renter and the dealership don't coincide.

"Instead, profitable dealer daily rental operations are usually run almost as independent businesses, with their own vehicles, their own desk in the dealership, dedicated staff, and their own phone number. Only by doing this can a real focus on customer needs be achieved and success found."

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