Volkswagen to Buy French Car Rental Company EuropcarBy MBN Staff | Thu, 08/05/2021 - 13:11
Automotive industry giant Volkswagen is getting close to acquiring 100 percent of car rental company Europcar’s stocks. Both enterprises, which have an important presence in Mexico, could work a US$3-billion deal, according to multiple sources.
Europcar has offices in 150 countries around the world including Mexico, where it has been present since 2003 and now has 125 branch offices and 2,500 cars. The company confirmed last week that it had received a €0.50 (US$0.59) per stock offer by Volkswagen.
The German car manufacturer is one of the most important employers in Mexico, with more than 15,000 employees and two plants, one in Puebla and the other in Silao, Guanajuato. In Puebla, Volkswagen assembles over 440,000 cars per year, including Jetta, Golf, Golf SportWagen and Tiguan. It was named Volkswagen’s most efficient plant in the world.
Car Rental, an Emerging Business in Mexico
The car rental industry is growing every year in Mexico. After closing 2020 with a US$678-million income, the carmaker expects to close 2021 with US$740 million and reach US$829 million in 2023, a 5.2 percent annual growth rate, according to Statista.
While Europcar started operations in Cancun, Quintana Roo, 8 years ago and now has over 2,500 vehicles, it is not Mexico’s largest car rental company. Hertz, Avis, Budget, Alamo and National are in a better position, but being acquired by Volkswagen could change the situation in mid-term. This is not the first time Volkswagen tries to buy the car rental company, since Europcar refused to sell at €0.44 (US$0.52) per stock in last June.
Consumers Prefer Renting Cars: Volkswagen
Volkswagen used to own Europcar and it wants to get back in business after saying that many customers nowadays prefer renting to owning. The original €0.44 (US$0.52) per stock offer was considered too low by the funds controlling Europcar in Paris, so Volkswagen raised its proposal hoping to close the deal, which could happen in the following days.
The possible move would give Volkswagen the possibility to take control of the car rental company’s operations in 150 countries around the world and grow as a supplier of multiple transportation options.