Car Rental Firms Enjoy Boom Thanks to New Car Delivery Delays

Lengthy-term rental motor vehicle firms are aggressively looking for to entice individual consumers by launching solutions that competitively maximize comfort. (graphic: Lotte Rental Co.)

SEOUL, May possibly 11 (Korea Bizwire)South Korean car or truck rental companies are savoring an unforeseen boom, benefiting from the provide shortage of new vehicles resulting from the semiconductor chip crisis.

Lotte Rental Co., the No. 1 player in the nation’s car rental current market, described history first-quarter success, submitting product sales of 648 billion received (US$507 million) and operating earnings of 70.5 billion received, up 10 % and 43.4 p.c, respectively, when compared to a 12 months in the past.

The industry’s No. 2 participant, SK Lease A Vehicle Co., chalked up revenue of 310.9 billion won and operating income of 22.9 billion won in the first quarter of this year, breaking the 300 billion won mark in quarterly gross sales for the initially time in its background.

The main driver behind the powerful effectiveness of the car rental firms is the very long-expression auto rental company, which accounts for about 60 per cent of their gains.

Since car rental companies deal with shoppers after securing automobiles in advance, their shipping time is incredibly quick.

When it comes to popular versions this kind of as Kia Corp.’s Carnival minivan and Hyundai Motor Co.’s Grandeur sedan, clients have to hold out for 14 months and 6 months, respectively, to consider shipping and delivery of new cars and trucks.

The shipping and delivery of rental vehicles, having said that, requires only two or three times.

When compared to the purchase of new autos, leasing is extra pricey. On the other hand, customers can swap the car any time they renew their annual deal, and have routine maintenance lined by the rental company.

Kevin Lee ([email protected])