OVER the past two years, the Balearic car hire fleet has shrunk by 30 percent but predictions are that business is picking up, the Balearic Car Hire Assocation (Aevab) reported yesterday.
Whilst there were 50'000 cars for hire in the Islands in 2007, there were only 35'000 available in 2009.
But Aevab President Ramon Reus said that the business has in fact benefited from the reduction because demand and supply at a time of recession have balanced out.
Reus believed that the fleet in the Balearics is going to maintain its present size during 2010 because with banks still being very stringent about lending, it is unlikely that companies could get financing to buy large numbers of new cars.
The President of Aevab said that far from renewing car hire fleets last year, some 10'000 had been returned to manufacturers under an agreement signed between the two parties.
Most returns were made between November in 2008 and February 2009.
Looking ahead to the coming summer, Reus said that the days of finding a car for hire on the internet in the Balearics for between 10 and 12 euros will soon be over.
He said that the cheap price was a speculative tactic and does not reflect the reality of a situation where daily hire will cost between 35 and 45 euros a day.
Reus said that the recession as a whole had been good for the car hire industry because it had put each company in its place and that profitability was gradually returning to a sector that had lost 90 percent of its direct customers in recent years.
He added that those who were offering speculative prices were either going to disappear or branch off into another area of business.
Reus, re-elected as President of Aevab at the beginning of the month, said that 2009 had been satisfactory in comparison with the last 10 to 12 years when between 70 and 80 car hire companies in the Balearics had been forced to close.
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