Budget Rent A Car Shutters Operations In Germany

The German franchisee of Budget Rent a Car ceased trading last week, leaving the global car rental brand without any outlets in Germany. All Budget-branded rental locations in the country have closed.

However, international customers of Budget can continue to make reservations for locations at 15 airports in Germany operated by sister brand Avis. Avis also will service reservations from these locations made by Budget customers before the franchisee, Robert Straub, went bust.

"Those 15 locations account for the vast majority of international bookings to that market," said Andy Lewis, head of marketing and e-commerce EMEA for Budget. For legal reasons, however, Avis is unable to fulfill any reservations made by domestic German customers of Budget.

Straub had held the franchise agreement since 2007. It filed for insolvency on May 4, but the receiver was unable to find a buyer for the business. Straub ceased operations on Sept. 1. Budget, which had been trying to build its corporate market in Germany, said none of its other operations in Europe are affected by the collapse and that it is looking to appoint a new franchisee.

"The reasons why the franchisee failed are numerous," said Lewis. "Germany is the largest car rental market in Europe and we are confident we can find a partner who will be successful for us there in the future."

The corporate market accounts for a much smaller share of Budget's business than for Avis, but Lewis claimed the recession has created much more interest from this sector. "In the U.K. in particular, we are seeing a lot of interest from companies looking to cut their costs," he said. "Budget meets that requirement, so we see the current market as an opportunity."