Wednesday, September 24, 2008

Car rental business has never been sluggish

EVERY year, many Jakarta residents head to their hometowns in the days leading up to Idul Fitri. That's why not only public transportation (air, land and sea) but rented cars have begun to be reserved. Renting a car is considered more practical and safer than traveling by train or bus, both having the tendency to be disorderly. In addition, those returning to their hometown with a large family find renting a car not only more convenient but also cheaper.

It has become commonplace over the past few years for companies to organize transportation for staff traveling to the same areas. This means that more rented cars are in demand at this time of year, as a number of car rental companies confirm. TRAC (Astra Rent a Car), for example, is flooded with orders. "We have even run out of stock. A number of companies organizing home-coming trips such as Telkomsel, Matahari and Sariwangi placed orders with us some time ago," said Olive, sales officer of TRAC Sudirman, Jakarta, as quoted by Kompas.

The most popular car for rent is the Toyota Avanza. Besides having a lower rental rate, the Avanza is reportedly fuel efficient. Renting an Avanza for four days costs Rp 1.8 million, seven days costs Rp 3 million and 10 days costs just Rp 4.1 million. The price does not include tax or driver hire. A driver costs Rp 539,000 a day.

Besides Avanza, TRAC, whose parent company is Toyota, also rents out other cars such as Rush, Innova, Vios, Altis, Camry and Alphard, with varying rental rates. An Innova, for example, costs Rp 2.8 million for four days, while a Camry or Alphard can be rented for four days at Rp 5.8 million and Rp 8.5 million respectively. The more luxurious the car, the higher the rent.

The demand for rented cars increases every year, particularly in the lead up to Lebaran. As the demand for rented cars is increasing, the car rental business is becoming more stable. Besides traveling home for the Idul Fitri holiday, the majority of those renting cars are companies, particularly large ones, which normally rent cars for two to four years.

Many large companies employ local or foreign experts on a two-to four-year contract, and the companies provide them with a car and driver. Buying a car that will only be used for two to four years would be inefficient, which is why it make sense to rent.

According to Prodjo Sunaryanto, TRAC managing director, at present many companies make use of TRAC's services because if they leased cars they would then be burdened with car maintenance. "As transportation management is not the core business of these companies, they should leave it to specialists like us," he said.

TRAC, which was set up in 2001, has its origin in Toyota Rent A Car, which was established in 1987. This rental business started with only five cars but now operates over 12,000 cars made up of sedans, jeeps, station wagons, utility cars, minibuses and trucks.

TRAC offers to help its corporate customers increase the efficiency of their transportation fleet so they can concentrate on their core business. The demand for safe and comfortable cars for the short term can be easily met and these cars are available at locations easy to access by corporate and retail clients, now numbering 15,000.

Over 20 years of experience in the transportation service business in Indonesia has enabled TRAC to master this business inside out. That's why TRAC earned the Indonesian Best Brand Award in Car Rental Business in 2006 and 2007 and the Superbrand Awards in 2005.

Meanwhile, Indomobil Car Rental, which rents out cars produced by Indomobil, claims to give the best facilities to its customers and provide qualified drivers. This car rental company's parent company is the sole agent for nine car makes, namely Audi, Hino, Mazda, Nissan, Renault, Suzuki, Ssangyong, Volkswagen and Volvo, and has been in the automotive business with its various supporting factors, such as a service network throughout Indonesia, for over 20 years.

Indomobil Car Rental itself, which has a vision to be the "best car rental service company in providing Indomobil products," has a vast network as it makes use of all the networks of the Indomobil Group.

While TRAC and Indomobil Car Rental have been established by leading automotive companies, Orix was originally a finance business. Autolease by Orix is an alliance involving Orix, Astrido authorized Toyota dealer and Astrido Pacific Finance for car leasing and is the right solution to meet a company's need for operational cars. This division provides various passenger cars of various makes with a rental period of between one and three years.

Not only concerned with car rentals, just like bona fide car rental companies in general, the commitment of Orix, which was originally a Japanese company, also includes comprehensive and optimum services, such as processing car registration (STNK) and vehicle inspections (KIR), taking care of vehicle insurance (all risk), supplying spare parts, offering a towing service in the event that a client's car breaks down, temporary replacement of a reserve car of the same class, as well as around-the-clock security and assistance.

Orix's clients consist of large companies, both multi-national corporations and private companies, including foreign companies. It is true that today the car rental business is dominated by large companies with 400 to 12,000 cars. Besides TRAC, Indomobil Car Rental and Orix, there are also Blue Bird and Tunas as well as smaller firms. According to the Association of Indonesian Car Rental Companies (Asperkindo) records, in addition to the aforementioned companies there are also PT Agape Sarana Berkat (Agape Rent Car), PT Agung Concern, PT Andalan Finance Indonesia, PT Arya Bangun Cipta, PT Bara Bentala Indonesia, PT Binamitra Inti Sejati (Trusty Rent Car), PT Dewamuda Perkasa (Mobilia Car Rental System), PT Grahamitra Lestarijaya (Transway), PT Harpa Sekawan, PT Multi Sri Service Corp. (Avis Rent A Car), PT Pratama Mitra Sejati (OTO Mitra Rent A Car), PT Surya Sudeco (Tunas Netral), PT Surya Anugrah Kencana (Harvest Rent A Car), PT Srikandi Multi Rental (Srikandi Rental Car) and PT Takari Sumber Mulia.

What's obvious is that the car rental business has a big opportunity to develop. Not only have automotive companies been lured to tap this business as a means to promote the image of their products but other companies have also taken up this business because of the alluring potential of profit. And it isn't so much the company with the lowest rates that will get ahead but the one that provides the best service. (Burhanuddin Abe)

The Jakarta Post, September 23, 2008

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