Car Rental Demand Softens

Softening demand and fleeting costs continued to challenge car rental companies in the second quarter. While Avis Budget Group saw gains in revenue per transaction and length of rental, demand, particularly from larger corporate accounts, began to decline in May when oil prices increased, said chairman and CEO Ronald Nelson, adding that the company expects demand softening to continue into August. President and COO Robert Salerno said Avis Budget would have "no choice" but to take a hard line in negotiations with commercial accounts and vendors.

Dollar Thrifty Automotive Group's per-car vehicle depreciation expenses increased 28 percent, year over year, primarily due to a softer-than-anticipated used car market, said Gary Paxton, Dollar Thrifty Automotive Group president and CEO. The company decreased its average rental fleet 4.4 percent. Demand and pricing also was softer than the company expected. However, the company saw its contracted corporate business increase approximately 10 percent, Paxton said.