Avis India, a partly-owned company of Avis Budget Group, Inc. (CAR - Analyst Report), proceeded on its previously announced expansion plans with the opening of its first rental location in Vadodara, Gujarat. With this, the company has increased its services to 20 cities and 45 rental locations in the world’s third-largest economy.
Last year, in June, Avis India announced that it would invest over 700 crores in the next 3–4 years toward expansion of rental locations and purchase of 7,000 vehicles on operating lease.
Avis Budget debuted in India 14 years back, when the company formed a JV with The Oberoi Group – Asia's leading hospitality company. At present, Avis India has nearly 2,000 premium cars in India with locations in major downtown areas and industrial hubs. The company also provides pick-up and drop-off services to and from major airports and railway stations in the country.
Avis Budget, which competes with JTH Holding Inc. (TAX), stepped on the Asian continent in 1970, when it opened the first car rental center in Hong Kong. In 1972, the company launched operations in Singapore, the Philippines, Malaysia, Indonesia, Brunei, Pakistan and Sri Lanka, thereby marking its expansion in the continent.
Since then, this Zacks Rank #3 (Hold) company has largely increased its footprint in the Continent., expanding operations in 18 markets including India, Mainland China, Vietnam and Taiwan. Moreover, the company has a presence in over 300 locations in Asia, where it provides effective vehicle rental, vehicle leasing and limousine/premium chauffeur services through a network of wholly-owned subsidiaries, JVs and licensee agreements.
At present, Avis Budget is expanding its operations through acquisitions and collaborations. The company is also investing in other booming markets where car rental demand is on the rise. This is well evident from Avis Budget’s latest move.
Apart from this, in March, Avis Budget successfully completed the acquisition of the world’s leading car sharing network company, Zipcar Inc. This strategic move has enabled the company to extend its offerings from car rental to car sharing, thereby helping it to compete with peers like United Rentals, Inc. (URI - Snapshot Report) and Hertz Global Holdings, Inc. (HTZ - Snapshot Report).
Furthermore, Avis Budget formed a partnership with PortAventura – a popular theme park and resort in Spain – and has opened car rental units this year in Spain and the Asia Pacific. We believe that such strategies, combined with better customer support systems, will boost the company’s top line and profitability.