AVIS SOUTH AFRICA: Driving Change in SA Mobility

As one of the country’s leading brands in the car rental space, Avis South Africa takes its position in the driving seat very seriously. The company has been at the front of the pack for decades and has traversed the ups and downs of the South African economy with success with relative ease.

The Avis brand history goes back to 1946 in the USA when a three-car operation opened at Detroit Airport. Fast forward 21 years and Zeda Car Rental and Tours was established in Bloemfontein in 1976 before being acquired and changing brand to Avis Rent a Car in 1969. From there, the business boomed as South Africa become known as the gateway to Africa and tourism offered international travellers something simply unavailable elsewhere.

Expansion beyond borders was welcomed and the company went through different owners including Servgro and Barloworld. But in 2022, Barloworld unbundled Avis Southern Africa, paving the way for the formation of Zeda Ltd. The new holdings company took on the license for the Avis brand across South African and sub-Saharan Africa with the purpose of ‘connecting humanity’. Now, Avis SA is home to more than 1100 people and a fleet of more than 18,000 vehicles.

During the 2020 pandemic, the journey was undoubtedly tough. CEO Ramasela Ganda, now Group CEO at Zeda, told Enterprise Africa that the company adjusted strategy quickly and made tough calls to keep things moving. Thanks to the important decisions made then, Avis has come out of the pandemic in top gear.

Several new initiatives are underway to help this booming local business to grow further.

The return of international travellers has allowed the company to accelerate quickly, and a focus on alternative ownership models have also proved popular as many drives now opt for leasing over buying outright.

iLEASE

At the end of 2023, Avis Fleet launched its new iLease offering, allowing customers to choose a lease deal as an alternative to full ownership over a period of 12 – 48 months. Included in the pricing is access to top range vehicles, insurance, maintenance, assistance, and administration.

The company labels the concept a shift to ‘car usership’ rather than outdated ‘car ownership’ which is expensive and risky.

Ultimately, this offering serves a growing need for convenience from users and follows trends already established in other markets around the world.

“iLease is an important milestone for us in leading the charge towards a usership economy in South Africa,” Ganda said at a recent event. “This product offering recognises that mobility is evolving, and today more than ever is redefining the way people move, connect and experience life individually. Additionally, the consumer behaviour of millennials, who are more open to new concepts, makes this an opportune time for Avis iLease to revolutionise the South African automotive landscape.”

Avis can source cars from most international brands and can offer anything from small hatch back to large bakkie. In South Africa, there remains a prestige linked to car ownership and many see status of being able to buy a car outright as a symbol of success. But the associated ongoing costs are prohibitive and escalate quickly. Leasing helps to spread the cost and allows for longer-term planning over finances. For Avis, the benefit is building a book of customers that can benefit from the famed Avis customer service and driving loyalty through a model that is more than one single transaction.

PREFERRED

In March 2024, the Avis Budget Group boosted its loyalty programme, Avis Preferred, adding new perks and financial benefits for customers that rent cars regularly.

All-new for 2024, the company is able to offer returning customers significant rewards for their loyalty including seamless customer service and a range of extras from relevant partners. At collection, customers can bypass queues and use a self-service kiosk to pick up keys instantly on arrival. New customers can gain 10% of future rentals immediately after sign up, those renting frequently can get upgrades in terms of the car they choose and the number of people able to drive the car, and airport lounge passes and priority passes can be purchased with large discounts. This, say the company, is all about making the entire travel experience smooth, with Avis at the heart of the voyage.

“Since Avis Preferred launched in South Africa to reward our regular customers, we have constantly looked to innovate the loyalty programme and are proud to be bringing these great new benefits to our Avis Preferred members,” said, Chief Sales Executive, Litha Nkombisa.

“Feedback from research that was conducted by (ABG) suggests that people are put off by rewards being inaccessible if they don’t rent frequently enough. Customers want instant access to benefits and relevant rewards, which is what we are giving them with this supercharged Avis Preferred programme.”

This is just the latest in a series of positive moves from the company after it released, in November 2023, a strong set of annual results a year on from listing on the JSE.

A 12% increase in revenue, 18% rise in EBITDA and a 23% increase in operating profit made nice reading for investors in the company’s first full reporting year under Zeda.  

UNWAVERING COMMITMENT

The rental business was particularly important in these results and Ganda was keen to reinforce the message that the company’s strategy around a wider mobility offering above simple car leasing was paying off.

“These results are a testament to our unwavering commitment to delivering exceptional value to our customers and shareholders. Our strategic focus on enhancing operational efficiency and expanding our service offerings has positioned us well in a competitive market,” she said.

“At the heart of our strategic approach is a deep investment in technology. By prioritising automation and digitisation, we’re not just streamlining our operations but we’re also paving the way for innovation in the usership economy. This technological advancement is key to adapting to the evolving needs of our customers and significantly enhancing their experience with us,” she added.

Ganda also highlighted the company’s Level 1 BBBEE status and strong ratings from Moody’s in terms of national and international credit. In January 2024, Avis also received several high scoring ratings from customer groups and industry surveys relating to quality of service and standards.

Clearly, Avis Southern Africa is operating as a well-oiled machine, perfectly supported by Zeda, fuelled by the energy of dedicated staff and navigated by a strong leadership team which is highly experienced and creative.

With international tourist arrivals set to increase over the next five years, and the local leasing industry expected to boom before the end of the decade, Avis is perfectly positioned to maintain its lead over competitors and its focus on exceptional customer service.

“Whether you embark on a business odyssey, a family escapade, or a solo sojourn, choose Avis and Budget for a car rental experience that transcends the ordinary,” the company says.