Avis saves $35 million

Avis Budget Group has made savings of around $35 million in its European division since buying the independent firm back in October 2011.

The US-based company’s moves include reducing the size of Avis Europe’s senior management team, resulting in savings of $6 million a year, moving to a shared service centre which will realise $13 million a year and consolidating its IT infrastructure, which will save $3 million per annum.

The company is also renegotiating leases on certain properties, offering a $1 million per annum saving, while consolidating the procurement of fuel, glass repair services, tyres and vehicle maintenance are set to save $5 million annually.

Ronald L Nelson, Avis Budget Group chairman and CEO, said: ‘The acquisition of Avis Europe allows us to achieve brand consistency for Avis and Budget around the globe. It allows us to attain leading market positions across Europe, Asia, the Middle East and Africa, including two of the markets that will be growth engines for us in the long run – India and China.’

Nelson was speaking as he announced results for the company for 2011, which saw Avis Budget Group globally grow revenue to $5.9 billion, up 14%. However, profits were hit by the $1 billion acquisition of Avis Europe and $117 million in costs relating to the failed attempt to buy Dollar Thrifty.

He also revealed that a Euro 350 million pan-European fleet financing structure has been put in place which will be the first step towards consolidating its European fleet and driving lower cost financing.

Plans are also underway to grow the market share of the Budget brand, currently worth 2.5% of the $10 billion European car rental market.

Nelson added: ‘Each percentage point in Europe is worth $100 million revenue, so moving Budget closer to the 10% share we have in North America is a large opportunity.’