Yearly Archives: 2007

Don’t get caught out!

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December 2007

As ‘the season’ approaches, SAVRALA would like to warn the South African public as well as tourists to the country against using the services of car rental companies that are not accredited by the Southern African Vehicle Rental and Leasing Association (SAVRALA).

In the Western Cape alone, the association is aware of in excess of 100 car rental companies who open their doors during peak holiday periods and compete purely on price – not on service or vehicle quality and often, with scant regard for customer safety. Their international customers most especially, are often not aware of the ‘price’ to be paid for going with the cheapest deal!

SAVRALA represents between 80% and 90% of the major car rental companies in South Africa and has a very strict Code of Conduct in place. On joining the association, members agree in writing to the stringent quality and standards laid down.

A key objective of this is to ensure that customers renting from a SAVRALA-accredited member will receive world-class product and service.

Customer safety is paramount and all association members must agree to adhere to strict quality and safety standards regarding vehicle maintenance, age and mileage. The average age of members’ fleets will, in most instances be 6 – 18 months with mileage usually not exceeding 40 000 kilometres.

It is SAVRALA’s experience that in the event of a car rental company complaint being received from a member of the public, it is usually from an international client and without fail, it is a complaint levied against a non-member of the association.

One of the most common complaint relates to vehicle quality and a prime example of this is an overseas holidaymaker who rented a vehicle with 400 000 kilometres on the clock. During the period of his rental, the vehicle’s engine seized and his credit card was promptly debited to the tune of R50 000.

When it comes to one’s corporate or personal car rental requirements, for quality assured service plus, always choose to use the professional services of a SAVRALA-accredited company.

(2007-12-SAV-Don’t get caught)

SAVRALA Manufacturer of the Year 2007 Awards

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Friday, 26th October 2007, The Ballroom @ Gallagher Estate, Midrand

Congratulations to all the winners!

Overall Leasing Rental
Gold: General Motors SA
Silver: Nissan South Africa
Bronze: Hyundai Automotive of SA		 Gold: Nissan SA
Silver: General Motors SA
Bronze: Ford Motor Co. of SA		 Gold: Hyundai Automotive of SA
Silver: Toyota SA
Bronze:  General Motors SA

Manufacturer of the Year 2007
General Motors South Africa

A proud moment for and a well-deserved win by General Motors South Africa …
GMSA scooped the Overall Gold as well as the Leasing Silver and Rental Bronze Awards

Teamwork wins for GMSA

General Motors is the new name on the SA Vehicle Renting and Leasing Association (SAVRALA) Manufacturer of the Year trophy in a year in which all the top echelon of the results table failed to improve their scores over last year.

Colin Windell, editor of Autonews, examines the scores.

The General Motors victory came via a third place in the Rental Section and second place in the Leasing Section – the only instance in which any of the top four improved their scores over last year. After being top dogs for the past four years, Nissan slipped into second place overall thanks largely to a 5,4% drop in performance in the Rental Section.

Hyundai finished third overall, the first full importer to make it onto the podium. For the past couple of years the company has shown significant improvements and earned a podium placing this year by winning the Rental Section – no mean feat considering the established players in that sector.

“Following on our excellent results in 2005 (1st Leasing / 2nd Overall), we were understandably disappointed with our results in 2006 when we achieved 3rd in Leasing and 3rd in Rental” says Derek Maltby, GMSA Fleet Manager.

“Soon after the 2006 MOTY Awards we, as a team, sat down and analysed our results to identify our weak areas. We also held meetings with the Rental and Leasing Companies to hear directly what we needed to do to improve our levels of service.

As a result, MOTY 2007 became a focus priority in our 2007 activities with the priority of winning either of the Rental or Leasing categories with the cherry on top being the overall winners.

Winning the award is a proud moment for all at GMSA and it is really a team effort with many individuals including our Kempston Road colleagues and the Woodmead Sales Team.”

“Over the past few years it has become important for us to penetrate the rental fleets,” says Stanley Anderson, marketing director of Hyundai SA. “Not only does it add to the number of vehicles sold but it also results in exposure for our vehicles to thousands of potential customers.

“The world class quality of the Hyundai product and the level of sales and after sales support has contributed largely to this award. We would like to thank all our rental customers for their support and look forward to our future dealings with them.”

The most promising performer this year is Honda which came from nowhere to be 5th overall in the Rental Section and 8th in the Leasing Section where the company showed an 11,8% improvement over last year, the combined scores enough for Honda to finish 7th overall.

“Winners of the 2007 SAVRALA ‘MOTY’ awards can be especially proud of their achievement, knowing that this year the process was once again fully embraced by those participating, says Anthony Calcutt of KA Smart who processed the results of the survey. “The scoring was undertaken with the involvement of the most people ever and organisations were eager to make sure that they were included.

“The scoring is made up of several sections containing many questions which have been identified as being important areas for all of the Rental and Leasing and Fleet Management companies of SAVRALA. Each of these questions indicates a specific need for the best service and support from the manufacturers of the products that they purchase, service and supply to their customers.

“In order to do well and offer service excellence, a manufacturer does not necessarily have to be the best in every question, just as long as they are consistently good across all sections throughout the year.

“Specific questions where the industry as a whole has improved in meeting the requirement of SAVRALA leasing members are, Part Availability for both ‘Body and Panel’ and ‘Service and Maintenance as well as Maintenance Pricing From The Dealers.

“Honda and Land Rover have done a fantastic job on improving their scores on all questions compared to last year.

“The rental members scored Product Reliability, with the exception of one or two manufacturers, slightly higher than the previous year. Unfortunately Theft Prevention Effectiveness was one area that no one could improve on. Honda displayed a great effort being placed 5th from having not being scored last year due to too small a representation.

Overall it was General Motors that managed to put in their best effort across the board resulting in them being able to take top honours, displacing Nissan by just 0,1 percentage points.”

The final results are calculated after two identical surveys of SAVRALA members during the year – the dual questionairre route taken to offset the effects of new model launches and other activities and to measure the consistency of the manfacturers in their dealings with SAVRALA members.

“We have seen a steady growth in our rental and leasing business over the year and whilst the normal dealer channel business has come under huge pressure due to the economic changes taking place in the market we have seen steady growth in the fleet business,” says Ford’s vice president of sales and marketing, Jacques Brent.

“The business environment has changed in the past 12 months,” says SAVRALA President, Paul Pauwen. “The combined effect of the implementation of the National Credit Act, the successive increases in interest rates, the weaker Rand, runaway commodity prices and the teething problems of the Enatis have conspired to slow new vehicle sales and reduce further the residual values of the fleets.

“At the macro level and taking a long term view, the underlying climate remains positive thanks to lively infrastructure and resource sectors. On the realistic side, the hot pace experienced in the tourism sector is likely to cool down in the near future. One of the keys is in the hands of government as it needs to demonstrate more resolve in its war on crime.

“At our industry level, it seems that the pursuit of volumes has been achieved at the expense of margins. Perhaps a revisit of risk-reward profiles is overdue as there is a pressing need to restore the industry’s sustainability and service levels going forward.”
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Overall Silver & Leasing Gold Awards
Nissan South Africa		 Overall Bronze & Rental Gold Awards
Hyundai Automotive of SA

Rental Silver Award
Toyota SA		 Leasing Bronze Award
Ford Motor Company of Southern Africa

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Many thanks to all the motor manufacturers and importers for their generous support of the 2007 SAVRALA Manufacturer of the Year Awards

Sincere thanks go to ABSA Vehicle Management Solutions for their sponsorship of the pre-dinner drinks and also to Avis Rent a Car, Contract Lease Management, Fleet Africa, McCarthy Fleet Services and Standard Bank of South Africa for their contribution towards the evening’s prizes.

R30 000 boost for Marang House

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For the second year in succession, Marang House was the worthy recipient of R30 000 which was contributed by SAVRALA and its members. Once again, a grateful Pieter Ernst was on hand to receive the cheque from SAVRALA president Paul Pauwen.

Following its winning tradition of the past few years – and in spite of not taking home the Overall Gold award – Nissan South Africa made a donation of R10 000 to Marang House. U-Drive Car & Van Rental contributed a further R10 000 to the organisation.

Car rental rates remain of concern to SAVRALA members

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July 2007

SAVRALA reports that the car rental industry continues to show very positive growth with rental days growing at 12% and the number of rental transactions showing a 13,3% growth over last year for the first six months.

According to Val van den Bergh, general manager of SAVRALA’s rental section, fleets are continually being increased to meet the growth in demand with an average fleet of 46 000 vehicles currently in place. This shows an increase of 15.8% for the same period over 2006.

Still of considerable concern to the car rental sector, however, is the 51% increase in the number of accidents and the resultant hike in accident repair costs. As a result of the growing number of accidents, fleet vehicle downtime (time spent off-road in repair and panel shops) is having a hugely negative impact on fleet utilization.

Operating costs that continue to soar, new car prices and the frequency of interest rate and fuel hikes (when transferring fleet) are all elements that are putting pressure on margins. Due to tough competition and the very competitive rates offered by some brokers, SAVRALA members are still finding it very difficult to increase their rental rates. In some instances, corporate customers are enjoying rates negotiated as much as three years ago.

Car rental customers are expecting more value-added offerings. While they are only prepared to pay the lowest possible rates, they still expect all the safety features such as ABS brakes and central locking in entry-level rental vehicles.

However, they are only prepared to pay the same price as before – that is, when these categories of vehicles were not equipped with these features. Today, certain safety features that were previously only available on luxury model vehicles are now standard in most entry-level vehicles. But, at a cost to purchase which is putting a lot of strain on SAVRALA’s car rental members who are already finding it very difficult to obtain rate increases.

Car rental customers expect speedy transactions, accuracy and good value for money deals at the rental counters and SAVRALA members constantly find themselves investing in staff training programmes, staff incentives schemes, system upgrades and improved technology. The cost of implementing these programmes does not necessarily mean more business – the investment purely serves to raise the bar in order to remain competitive and to meet customer expectations.

By comparison, ‘lost cost’ airlines are offering low budget rates with strict terms and conditions applicable in order to qualify for the low rates offered. These include online bookings only, upfront payment, limited or even no option to change or to cancel reservations, little or no opportunity to upgrade, no pre-seat allocation and very basic or refreshment services at an additional cost.

While value-added services come at a cost to the rental companies, car rental customers still expect them but at rates that compare with the cost of trailer or carpet cleaning machine hire of R150 – R200 per day!

(2007-07-SAVRALA-rental update)

2007 – Car rental industry takes up the challenges

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March 2007

Media coverage of the country’s shocking crime statistics – locally and internationally – is extensive. Crime at one level or other has taken a personal toll on many South Africans and while this is of significant social concern and is not in any way being negated by the Southern African Vehicle Rental and Leasing Association (SAVRALA), of particular relevance to South Africa’s tourism and related sectors is the increase in crime targeting tourists.

Whether government cares to admit it or not, lawlessness is a deterrent to international tourism and long term industry growth and, in the run up to the FIFA Soccer World Cup in 2010, it must be proactively addressed. As a result, SAVRALA members have added their voices to the many thousands of corporate and individual South Africans demanding a more forceful and positive approach to reducing crime in South Africa.

For the car rental industry, vehicle and related crime remains a constant challenge. Between January and November 2006, it’s estimated that vehicle theft cost car rental companies an astounding R32.6-million. For an industry that is largely self-insured, this represents a significant amount. Other factors facing this sector are credit card fraud, fraudulent voucher transactions and vehicle accidents which, unfortunately, translate into rental rate increases to the end user.

SAVRALA is already working closely with national and regional local law enforcements agencies, government departments as well as Business against Crime to find solutions to combat these criminal activities, most of which are orchestrated by professional crime syndicates.

According to Val van den Bergh, general manager of the association’s rental section, however, “to safeguard our local and international customer bases, more must be done.”

Thabo Mbeki on crime …
In his State of the National address delivered on 9 February, President Thabo Mbeki said that “South Africans must continue and further intensify the struggle against crime” and he undertook to implement a detailed programme “to improve the safety and security of all citizens and communities.”

Government had already surpassed the targeted figure of 152 000 police officers employed in the South African Police Service “and, while we have improved the training programme, we recognise the fact that the impact of this is not yet high enough for everybody to feel a better sense of safety and security.”

And so say all of us!

SAVRALA golf day raises R80 000 for STEPS

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MC Neil Andrews (left), Karen Moss, CEO of STEPS Charity and SAVRALA president, Paul Pauwen

For the second year in succession, STEPS Charity was the beneficiary of SAVRALA’s 2007 Community Outreach Golf Challenge which recently took place at Modderfontein Golf Course.

Captured at prizegiving: MC Neil Andrews (left), Karen Moss, CEO of STEPS Charity and SAVRALA president, Paul Pauwen

Since initiating its Community Outreach Programme in October 2002, the Southern African Vehicle Rental and Leasing Association (SAVRALA) has raised in excess of R330 000 and donated it to several deserving charity organisations.

For the second year in succession, STEPS Charity was the beneficiary of SAVRALA’s 2007 Community Outreach Golf Challenge which recently took place at Modderfontein Golf Course.

Representatives from SAVRALA member companies turned out in full force to play in the event with many supplementing their support by sponsoring individual holes, players’ giveaways as well as prizes. It was particularly gratifying to witness the participation by the captains of the leasing and rental industries who turned out in support of the charity event.

At the prize giving, MNet sports presenter, Neil Andrews took to the stage as master of ceremonies and players and their guests enjoyed a good many laughs. The audience dug deep into their pockets in support of the evening’s auction – a major source of the funds raised by the event – and a resounding success.

The winning four ball was hosted by Martin Lydall of Imperial Car Rental and he and his team have committed to defending their title in 2008.

Paul Pauwen, SAVRALA president, handed a cheque for R80 000.00 to Karen Moss, STEPS Charity’s chief executive officer, who expressed her appreciation and congratulated the day’s winners. STEPS is a registered
Section 21 organisation whose objective is to raise funds and provide information and support for babies and children with clubfoot and other lower limb disorders.

“Thanks to SAVRALA and the generous support shown its members and all you here, there is another big winner present here tonight – and that is STEPS.”