- File
Fewer companies are remaining in the 'official' car rental business.
Teino Evans, Staff Reporter
THE ONCE easily identifiable green RR licence plates have almost all disappeared. This is an indication of the steep decline in the once flourishing "formal" rental car industry in Jamaica.
Within the last decade, many companies have had to either scale down both the number of staff and their fleet of cars, or have totally collapsed.
Some legitimate players currently in the business say that, despite weathering the storm, there are still many problems plaguing the industry today.
Evidence of this is the vast decline in membership of the Jamaica U-Drive Association (JUDA), an organisation of car rental companies. The Association, which boasted more than 60 members in 1997, has fewer than half that number today.
Many car rental owners, including JUDA President, Mike Campbell, have attributed this to high interest rates, fewer visitor arrivals and competition from used-car dealers.
One director of a prominent car rental company in Kingston said that she has lost more than 50 per cent of her business because of the rise of 'illegal operators' who rent their private vehicles from home.
According to her, persons now tend to drift towards these private owners who rent vehicles at cheaper rates. Furthermore, she noted, not many persons were willing to pay the large deposits that car rental companies require.
"As a result, my company has had to scale down our fleet of more than a 100 vehicles to just under 20."
Sergeant Deloris Mitchell, of the Police Traffic headquarters confirmed that the rental of private motor cars was illegal.
"Private motor cars are not licensed for hire or reward. They are for personal or domestic use only," she said.
OTHER PROBLEMS
Nota Johnson, of Rent-A-Car Caribbean Tours Limited, said this was not the only problem that car rental companies have to face.
While admitting that most companies thrive on 'repeat customers', Ms. Johnson said most tourists visiting the island normally go to the north coast, and so car rental companies in Kingston have to fend for themselves.
The companies in the initial stage of their operation must have all their vehicles comprehensively insured. This, Ms. Johnson said, is at a much higher cost (over $100,000 per vehicle), because of the high risks involved. These risks range from tourists being unfamiliar with local roads and the targeting of rental cars by criminals.
The influx of imported used cars into the country have also helped to undermine the growth and recuperation of the industry.
"Previously, we never had the deportee vehicles to contend with. But now that the used car market has taken off, persons are now buying their own cars at affordable prices," said Andrew Campbell, director of Fiesta Car Rentals.
The heavy influx of imported used cars has had an impact on the industry in more ways than one, the remaining players said.
In 1997, the Government had to grant duty-free concession to the industry in an effort to keep the industry afloat. It allowed duty-free concession for new right hand vehicles with up to 3000 cc engine size and a waiver on the General Consumption Tax (GCT) of used vehicles.
TRYING TO SURVIVE
However, Mr. Campbell said although they continued to face hard times, his company has tapped into a new market, and as such, has managed to survive.
"There are more demands for rental cars now from business organisations, and the majority of our clientele now are companies," Mr. Campbell said.
He further explained that these corporate companies have found it taxing to purchase and maintain their own fleet of vehicles for staff members, and have now sought their services.
Not many legitimate players in the business can see a light at the end of the tunnel for the local car rental business, but Mr. Campbell maintains that "the industry is growing, despite current challenges."
Within the last two decades, more than 20 car rental companies have had to close their doors, among them, Avis, one of the largest car rental agencies in Jamaica and National Car Rentals.
