Worldclass Rent a Car Co, the local licensee for Budget car rentals, will spend 1 billion to 1.2 billion baht next year to expand business amid rising demand.
Most of the expenditure will go to buying 1,500 new cars to replace older vehicles, said managing director Vanchai Tangpanichdee.
The additional cars will give Budget more than 4,000 cars aged less than 18 months by the end of next year.
Moreover, the company plans to open one or two car rental centres next year to expand service in tourist destinations and border towns such as Nakhon Phanom and Mae Sot district, Tak.
It has 24 rental centres in major tourist destinations, with three in Bangkok at Suvarnabhumi airport, Don Mueang airport and RCA, and the remaining 21 upcountry in Chiang Mai, Udon Thani, Trang, Pattaya, Hua Hin and Ubon Ratchathani.
Booming demand for car rentals has lured more firms to the market. Due to the intense competition, a price war forced out many players in recent years, said director Ronachai Chinwattanaporn.
Budget focuses on quality, safety and reliability instead of price strategy.
Thailand's car rental business is estimated between 18 billion and 20 billion baht a year with an average growth rate of 10%. More than 100 companies provide rental services with over 150,000 cars.
The business still has room to grow, driven by demand from the upcoming Asean Economic Community (AEC) and the sharp growth of budget airlines, said Mr Ronachai.
The low-cost airline business is expected to grow 30% a year, making it easier for travellers to fly and then rent a car.
Budget's rental revenue is forecast to reach 1 billion baht in 2013, up 15% from this year's 870 million baht.
Apart from car rental business, Mr Vanchai said the company plans to expand other car-related activities in future. The second branch of its used-car centre Car Dee Sure OK will open in Chiang Mai by year-end.
The company recently opened a Car Dee Sure OK and Wax World, a car care centre, near the Thailand Cultural Centre.
Worldclass Rent a Car is a joint venture of ICC International Plc (a Saha Group subsidiary), Budget International and Yontrakit Group. ICC holds 44% in the venture, Budget 31% and Yontrakit 25%.
About the author
- Writer: Pitsinee Jitpleecheep
Position: Business Reporter