Europcar buying up competitors and struggling in the UK – Goldcar and Buchbinder joining the group
Europcar Group S.A. with headquarters in Saint-Quentin-en-Yvelines north of Paris is growing in Europe.
The expansion of Euronext France listed Europcar (EUCAR) over the last year has included German large rent-a-car and fleet operator Buchbinder Autovermietung, The Danish Europcar licensee formerly held by celebrity billionaire Karsten Ree and Goldcar, the infamous cheap online car hire provider operating primarily in the leisure market in the crowded tourist locations and airports in Southern Europe.
More on the Goldcar acquisition story.
The stock price of Europcar Group (Euronext: EUCAR), after initially disappointing investors, is up and above the level at the initial offering, which took place in the summer of 2015.
Europcar in Flensburg, Germany – popular amongst Danes looking for a cheap deal across the border © Photo: Find-Cheap-Car-Hire.co.uk
Leicester-based Europcar UK struggle
In the UK, Europcar is doing less of a financial killing.
2016 saw the UK Europcar operation result almost half as pre-tax profits came in at £13.1 million, down from £25.2 million. Revenue fell slightly from £343 million to £333 million.
In many areas, Europcar is facing increased competition in the UK from mainly low cost providers of rental cars, but also from an increasing market for car sharing and car clubs.
Europcar UK claims that Brexit has had an impact and is to blame for the partly failing results. If that is true, Europcar UK arguably must be in for a proper financial beating in the next few years to come.
If inflation caused by the fall of the value in sterling (GBP) already can be felt, the costs will no doubt rise when Britain exits the EU; more or less disregarding the nature of the final exit agreement.
The businesses in the British rental car sector must be bracing themselves for tough winds ahead if the message from the Europcar UK management team is to be believed.
The UK operation employs approximately 2300 people in its 500 Europcar locations in England, Scotland, Wales and Northern Ireland.