Avis Budget Buy Payless Car Rental, How Long Until There Are Only 4?

Hi all,

Last week the FTC gave final approval to the Hertz buyout of Dollar and Thriftypayless Rent A Car leaving the U.S. car rental market bossed by just 3 major companies, Enterprise (Alamo and National), Hertz (Dollar and Thrifty) and Avis Budget.

On the peripheral of these major players sits FSNA, who as part of the Hertz ‘s DTAG purchase took ownership of Advantage Rent A Car making them the 4th largest car hire usa company, a title that sounds impressive but in reality still leaves them some way off the top 3.

One of the companies looking to vye for fourth spot was Payless Car Rental, I say was because as of today Payless Car Rental the Florida based car supplier is now part of the Avis Budget group, who have reportedly purchased the mid tier company for $50 million! Not bad for a company that turns over $80 Million a year.

Why have Avis Budget bought this little known company? Well here’s what Ronald L Nelson Chairman & CEO of Avis Budget said;

Payless expands our global footprint, enables us to support Budget’s mid-tier brand positioning, and gives us greater flexibility to capitalize on opportunities in an additional segment of the car rental market in order to help accelerate our growth

Hmmm interesting… I know what it certainly does, and that is bring Avis Budget in line with Hertz in regards to markets it can enter, allow me to explain.

Prestigious aimed at business class and the affluent -  The Hertz brand falls into this category as does Avis.

Mid-Tier aimed at holiday makers - Hertz have Dollar Rent A Car for this and Avis have Budget.

Value Brand aimed at the no thrills market – Hertz could use Thrifty here and now Avis have Payless…

The more interesting part is what will Enterprise do? Their prestige brand is National, their mid-tier brand is Alamo but will they use their own Enterprise brand as a value option?…

Congratulations to Payless car rental as this cash deal seems pretty impressive, from a consumer view, the competitiveness in the  North American market just shrank.

Kind regards,

James

 car hire USA


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