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Tunisia: car rental industry plagued by illegal operators

Newly elected President of the National Chamber of Car Rental Agencies Lassaad Mestiri, takes stock, in an interview with Africanmanager, of the situation of the sector and makes recommendations to promote this activity. Interview:

How do you assess the current situation of the sector?

First, it is important to note that this sector has about 500 companies for a fleet of 19,000 vehicles. The numbers change, since there are always new creations along with bankruptcies of some companies.

For the number of vehicles, the Tunisian law requires a minimum of 25 vehicles per company. Unfortunately, this legal clause is not respected by a lot of colleagues who work with only 5 or 6 vehicles. This number does not bring profitability and push operators to violate the law in order to survive.

The revolution has changed the game especially since several companies have been heavily affected.

What about the volume of these losses?

No one can quantify the exact cost although we know that there are colleagues who are bankrupt and the number of cars in their fleets has declined significantly.

It is difficult to get information. We assume that there dozens of stolen and even burnt vehicles. And here I would like to say that the controversy that had accompanied the story of snipers operating on rental cars has done much harm to the profession and the image of the profession, while several cars were stolen.

Add to this the fact that many car rental companies have ceased business since the advent of the revolution because of the decline in tourism activity and the inability of owners to honor their commitments vis-à-vis leasing companies. This has directly contributed to the decline in turnover of firms located in tourist areas which face a serious crisis.

Although there are signs of recovery, it must be said that tourists stay in hotels and do not rent cars to get around because of the instability that the country still lives through in this post-revolutionary period.

To these cyclical reasons add structural problems.

Can you tell us about the difficulties that still hinder the development of car rental in Tunisia?

Like other sectors, the car rental business is suffering from unfair competition and above all price slashing in the face of the necessary investment estimated at hundreds of millions to start a business in strict accordance with the specifications governing the profession ( 25 cars minimum, staff affiliated with the NSSF, garage to house and carry out maintenance of vehicles…).

There is also another major problem which is leasing. This strategic partner of car rental continues to impose high fees, which partly explains soaring rental prices.

Settling insurance claims is another concern that worries industry professionals. Add to that the car dealers who charge exorbitant fees.

What should be done to solve these problems?

As a Chamber, we try to limit the damage by calling for the establishment of a sector study undertaken by an independent consultant firm to assess the current state of the profession.

Efforts are continuing to redefine the specifications and identify strict standards in order to better organize this profession. We cannot start a car rental business without any visibility.

On another level, the National Chamber of Car Rental Agencies work to create a better partnership with car dealers. And we will work for more professional relationships with them to promote this activity

With regard to leasing, we try collaborate with the Federation of Banks and partnership mechanisms. In this regard, we want the ministry to intervene to lower the rates imposed by leasing companies.

The last challenge is insurance, and there, we ask for lower rates of insurance premiums while improving the mechanisms for reimbursement of claims.

And to conclude?

I remain optimistic about the future of this profession although it suffers from illegal operators. Of the 500 renters, almost half (known as subcontractors) does not respect the law and professional ethics.

I take this opportunity to call on our ministry, that of transport in this case, to apply the law by sanctioning any illegal practice. The Department of Transport must take responsibility and fight against this scourge which is seriously prejudicial to the image of our business.

Finally, if the ministry responds rigorously, and if professionals respect the rules of the game, the car rental sector will see better days.

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