Within less than six months of owning the National and Alamo rental car companies, Vanguard Car Rental USA has consolidated suppliers and replaced more than 185,000 of the 220,000 vehicles in its fleet. Jerry Mosiello, Vanguard vice president of sales, said the firm plans to replace the remaining 35,000 cars by the end of June.
While the numbers may appear dramatic at first glance, renewal of large fleets is fairly common, according to Neil Abrams, president of Abrams Consulting Group, a rental car industry consulting firm. "Vehicles are constantly turning," he said. "It's not an overwhelming issue, and the National clientele really wants state-of-the-art vehicles that are clean, maintained well and relatively low in miles."
Abrams said holding times for rental cars generally range from six to 12 months and up to 15 months. Most are acquired through repurchase programs with manufacturers, which dictate mileage and time limits on how long the vehicle will stay in a rental car fleet. When those benchmarks are met, ownership reverts back to the manufacturer for the cars to be sold in the aftermarket. "It's a very dynamic process," Abrams said. "Turning over the fleet is a good thing, but not remarkable, but it sounds like they're being aggressive in bringing new cars going into their busy season. It's healthy for the company, good for the consumer and good for the competitive market."
Mosiello said the change in vehicles, like the change in ownership, has progressed as expected and has caused little or no disruption to business. "The transition should be seamless to corporate buyers," he said. "There's been a loyal following with regard to a corporate travel standpoint." Vanguard claims to have retained 97 percent of pre-existing corporate accounts, and Mosiello noted, "We're definitely seeing the business traveler come back. We're mainly seeing growth in small and midsize businesses. The foundation of the National brand is the business traveler and to see the positive numbers is significant and encouraging. It's great to see some positive results."
Vanguard has begun offering Onstar within some of the new vehicles, and the service is a standard option in luxury rentals. The company during the next few months also is testing a portable GPS-type device that will be available for all car classes.
In October of 2003, Worldwide Accelerated Leasing Inc. purchased ANC Car Rental, parent of Alamo and National, renamed it Vanguard Car Rental USA and ended its five-year financial struggle
(BTN, Nov. 10, 2003).