Moving ahead with the expansion of its Budget Car Rental brand and further extending itsmulti-brand strategy, Avis Budget Group Inc. (CAR) penned a deal with Barloworld Ltd. to operate its Budget Car Rental brand in southern Africa.
Barloworld and Avis Budget have been partners for 45 years now. The former already operates the Avis brand in Angola, Malawi, Mozambique, Zimbabwe, Botswana, Lesotho, Namibia, South Africa, Swaziland and Zambia. Moreover, per the latest licensed deal, it will now also operate its Budget brand in all these locations except Angola.
Barloworld has time and again testified its capability by the success of the Avis brand in southern Africa. The brand has gathered significant honors and recognition, particularly for its impressive customer service in the region. Adding a new brand to Barloworld’s portfolio, Avis expects the former to do justice by rendering the high quality service its Budget brand customers are used to.
The aforementioned agreement, which will take effect from Mar 1, is likely to benefit both the Avis and Budget brands as it will help them gain from Barloworld’s enriched car rental market knowledge and experience.
Budget Car Rental is a well-known car rental brand under which Avis Budget operates as an industry-leading vehicle rental service provider, targeting value-conscious travelers. The brand also operates a truck rental business in the United States, through a wide network.
Avis Budget is a leading vehicle rental company in North America, Australia and New Zealand. Moreover, a formidable network of over 10,000 rental locations in nearly 175 countries, along with its acquisition of leading car-sharing network, Zipcar, enables the company to strengthen its well-established position in a highly competitive vehicle rental industry.
Avis Budget has been focused on taking its Budget brand forward. The company recently bought the Budget licensee for Southern California and Las Vegas. Further, it had acquired the license for Budget Car & Truck Rental in Edmonton, Alberta, Canada earlier in 2014, apart from directly starting operations of a Budget Car Rental brand in Portugal.
We believe these moves will help Avis Budget to enhance the Budget brand loyalty through better utilization of the licensee’s established presence and worldwide network. Moreover, Avis Budget’s fundamental drivers, such as sustained productivity growth resulting in better margins, volume growth and potential revenue-generating synergies from the Avis Europe acquisition, bode well.
Avis Budget currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include ExamWorks Group Inc. (EXAM), comScore Inc. (SCOR) and SPS Commerce Inc. (SPSC), each with a Zacks Rank #2 (Buy).
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