Excessive Car Rental Sourcing May Derail Market Recovery

BMI fears that over exuberance in South Africa's car rental sector due to World Cup preparations may impact new car sales in future if rental demand falls short of the extra cars purchased. Sales to rental companies in Q110 were double those of Q109, as companies anticipate increased tourism business linked to the tournament. However, early signs suggest that the extra vehicles may not be needed as corporate travel declines due to the rising travel and accommodation prices that are another by-product of the competition.

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