Avis Budget Expands Car Sales Program - Analyst Blog

Going ahead with its ongoing strategy of enhancing operational efficiency, the leading global vehicle rental company, Avis Budget Group Inc. CAR yesterday announced the expansion of its Consumer Car Sales Program in Massachusetts, Ohio and Tennessee.

The program, which the company operates in partnership with the United States' largest automotive retailer AutoNation Inc. AN, allows prospective buyers to select from a wide variety of late-model off-rental Avis and Budget vehicles.

The online shopping option at www.avis.com or www.budget.com was developed to make buying simple and hassle-free. The customers can also book for their ‘ultimate test drive' online for two hours to up to three days. For two hours the company will not charge a single penny, but above that it will charge a nominal rental fee which will be reimbursed if the customer chooses to purchase the vehicle through AutoNation Direct.

The company has been successfully operating its Consumer Car Sales Program in other states including New Jersey, Georgia, Arizona, Colorado, California, Florida, Texas, Illinois, Nevada and Michigan. Under the program, the customers have the option to choose from a wide range of well known domestic as well as international vehicle manufacturers.

The initiative will provide an alternative solution to dispose of the company's late model vehicles, thereby enabling it to lower fleet costs. This will help in improving the company's operating margin in the long run.

We remain impressed with Avis Budget's sustained focus on productivity and cost containment initiatives, which in our view will help the company achieve its goal of higher operating margins.

Carrying a Zacks Rank #3 (Hold), Avis Budget is one of the leading vehicle rental company in North America, Australia and New Zealand. Moreover, a formidable network of more than 10,000 rental locations and 350,000 vehicles facilitate in strengthening its position in the highly competitive vehicle rental industry.

This Parsippany, NJ-based company follows a core global strategy of collaborating with leading travel brands to widen its customer reach while generating additional demand for its services. Last year, Avis Budget successfully completed the acquisition of the world's leading car sharing network company, Zipcar Inc. This strategic move has enabled the company to extend its offerings from car rental to car sharing, thereby helping it to compete with peers like United Rentals, Inc. URI and Hertz Global Holdings Inc. HTZ.