RIYADH, 15 February 2003 — With Saudis and expatriates in a cautious mood in the wake of the current situation in the region, a cross-section of car rental companies have reported a sharp drop in their business compared to the same period last year.
“People are sitting tight with their money at this time of the year,” Jamal Alsawaf, rental supervisor of Abu Diyab, one of the Kingdom’s biggest car rental companies, told Arab News. He said that as against 150 cars a day that used to be rented out during last year’s Haj, this time they were averaging 60 to 70 vehicles.
Jamal said that besides the drop in the car rental business, the leasing business segment had also taken a beating in the current climate of spending cuts. The trend was noticeable not only at Abu Diyab but also at other car rental firms in the capital with a large number of their vehicles parked outside their premises.
According to M.T. Ashraf of T.R.C. Rent-a-Car, their business shrank by 60 percent compared to last year’s Haj. However, all the firms contacted by Arab News said the situation was much better during the Eid Al-Fitr holidays, when the demand was riding high.
Admitting a drop in their business, a spokesman of Al Falah Rent-a-Car, which has eight branches in the Kingdom, said another major factor was that some had switched over to buses as a mode of transport. If this is a foretaste of the shape of things to come, the situation could deteriorate further if the possibility of war becomes a reality.
Another prevailing trend was the wide disparity in the hiring charges. The Korean cars start from as low as SR60 per day in some firms, while others are charging SR110 for the same brand and model. The upper end ranges from SR600 to SR2,500 for Mercedes. This wide fluctuation is attributed to the deregulation of hiring charges by the Ministry of Communications in line with its policy to promote competition.
