Value and future prospects drive Volkswagen interest in Europcar, says GlobalData

Following reports that Volkswagen Group is interested in acquiring French car rental firm Europcar;

David Leggett, Automotive Analyst at GlobalData, a leading data and analytics company, offers his views:

“The car rental business has been hammered by COVID-19, but as economic activity picks up and operators introduce deep cleaning protocols that can reassure customers, the outlook for the sector will improve.

“For a vehicle manufacturing company, there is always the obvious attraction in such an acquisition of having a ready-made captive market to supply with vehicles.

“Now could be a good time to acquire the Europcar brand and assets at a good price. Rumoured interest from private equity companies suggests that others are also seeing an opportunity.

“A possible advantage for VW is that it used to own Europcar. Although it divested in 2006, it may feel it has some inside knowledge of the sector and company that is relevant to future earnings prospects.

“It could also utilise Europcar infrastructure to help with the rollout of future mobility services.

“COVID-19 has undoubtedly created new uncertainties in the transport and mobility services space. However, vehicle hire companies are sure to play a part.

“VW may feel that acquiring a vehicle hire company at a very good price is too good an opportunity to overlook.”

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