Enterprise Rent-A-Car, the US-based car rental company with annual revenue of $22 billion, has announced its operation in Vietnam.
A representative of the company said Vietnam is the first Asian market that Enterprise Rent-A-Car has entered, explaining that Vietnam is a large market but supply remains inadequate. The service providers are mostly small companies or household-run businesses.
Vietnam’s car rental market is expected to grow rapidly thanks to the continued surge in foreign investment, expected to last at least for 10 more years. As more foreign workers flock to Vietnam, the car rental demand will soar.
He noted the strong rise of the middle class in Vietnam and the young generation which has a different lifestyle than their parents and grandparents. They do not attach much attention to owning luxurious cars and living in large houses, but care about life quality and life experience. They could be potential customers in the car rental market.
Regarding the competitiveness of Enterprise Rent-A-Car, analysts say the rates set by the company from the US are between VND800,000 and VND2.6 million a day, the same with rates set by Vietnamese enterprises.
Nguyen Thi Hien, the owner of Hien Toyota sale agent chain in HCMC, also noted that reasonable rates show that the American company has studied the Vietnam market well.
|The strong rise of the middle class in Vietnam and the young generation which has a different lifestyle than their parents and grandparents|
She said that the presence of big players in Vietnam will have positive influences to the market as the supply will be more diverse, which means more choices for customers.
Nguyen Linh, director of a company which uses car rental services, said customers worry about the quality of cars and the prestige of service providers.
“There are so many risks we have to face. Cars may have low quality with counterfeit tires, substandard engine,” he said. “When prestigious companies turn up, the services will be more competitive.”
Nguyen Minh Dong, a car expert, warned that the presence of Enterprise Rent-A-Car, and other foreign companies in the future, will be a threat to domestic companies, because foreign service providers use new technologies and they have strong brands.
Meanwhile, domestic service providers believe there is no need to be worried about the presence of foreign companies. Vo Quoc Binh from Binh Minh Investment JSC said that Vietnamese companies have advantages in some market segments.
While foreign companies mostly target customers who are businesses, senior foreign businesspeople who have long-term rental demand, and tour organizers, Vietnamese rent cars for VIP guests and wedding parties.