As Poslovni Dnevnik/Marija Crnjak writes, what began as a result of the global coronavirus pandemic in the Croatian rental car market has continued even more fiercely and with even greater uncertainty under the new circumstances of Putin’s shock invasion of Ukraine, bringing total disorder to the car rental market worldwide, including here in Croatia.
Purchasing new cars is a bit like taking your chances on the lottery, no well-known models are being used for this purpose, used vehicles are being sold at never higher prices, and with demand stronger than supply, service prices are also soaring.
Here in Croatia, this will certainly affect the quality of tourist services offered in this year’s summer season for which preparations are now underway, albeit with increasingly uncertain forecasts.
As has since been found out in the Croatian rental car sector, there are no indications that this situation will change significantly in the next year, and what possibly acts as a comfort to those working in this sector is that this crisis could serve as something corrective to the dumping market which has become a problem in itself over more recent years.
“Due to the coronavirus pandemic, supply routes were disrupted, which has worsened with inflation, and especially with the uncertain situation in Ukraine. Preparations for the summer season are underway, and if the predictions we had before the invasion of Ukraine do come true, which is an increase in demand, we’ll have a disruption in the Croatian rental car market, as will other Mediterranean countries,” said Boris Zgomba, CEO Uniline, which develops its car rental business through the very well known Europcar franchise.
Europcar is currently in the process of assembling a fleet that is usually completed by the month of April, so there’s still some time left, albeit not much. Zgomba says it was challenging to get their hands on vehicles, but the situation isn’t that dramatic. What comes to them, however, will be more expensive than last year, when demand was better than back in 2020, and prices have already jumped compared to the time before the global pandemic.
However, before the pandemic struck, at a time of car overproduction, supply was higher than demand, but was more and more strained across the entire service chain. This led to cars being rented for ”peanuts”. Kresimir Dobrilovic, the founder and owner of the leading European franchise Carwiz International, often pointed out this problem here on the Croatian market.
“The market of the whole of Europe is in the same basket, and it comes down to the fact that everyone manages as they know how. It used to be normal to get several hundred cars at once, now you literally go from showroom to showroom and get a few cars which are more expensive, but you have to have a basic means of work and you need safe cars. It’s a big issue because importers can’t guarantee that car rental companies will get the vehicles they ordered and paid for, and companies can’t accept reservations if they aren’t sure they will even have a fleet, because they have to try to maintain the trust of their customers,” explained Dobrilovic.
It is equally challenging on the market of used cars, whose prices have skyrocketed.
“Wholesalers of used cars also contact us every day with some seriously expensive options, which would make sense if we could predict how the market will move in the coming period. Because buying a car and not knowing how much you can sell it for in a year is a very risky move,” explained the owner of the Carwiz International franchise, who recently sold his operating business here in Croatia to ABmobil rent.
As was recently announced, the new Management Board of Carwiz in Croatia plans to increase the number of branches compared to last year in 2022, and it also plans to significantly increase the size of its vehicle fleet to more than 1,500 vehicles in the summer season.
What awaits the Croatian rental car market in the future is hard to predict, but some research carried out in England has shown that the market won’t return to normal in the next three years, and we still have a great unknown hanging above our heads, and that’s how the war in Ukraine following Russian invasion will unfold.
“Although it’s very difficult to make any forecasts now, our colleagues might think about how it was before the pandemic, when the large offer and the way of doing business led to a lot of dumping in the car rental business. This is an opportunity for the market, once it stabilises, to become more aware and return to some dimensions of profitable business,” concluded Kresimir Dobrilovic.
For more, make sure to check out our business section.
