Bidvest is weighing its options on the possible sale or closure of its car rental business as it struggles to recover from the impact of the Covid-19 pandemic.
“Given the dire reality facing our industry and the expected significant volume reductions in the travel and tourism sector, we must recognise that our business is not protected from the economic devastation,” Paulette McGhee, CEO of Bidvest Car Rental, said in an emailed response to queries.
“Unfortunately, the current commercial situation the business finds itself in is unsustainable and as such, a decision has been made to either sell or close the company.”
Bidvest’s car rental business includes car, van, truck and coach hire in South Africa, Botswana and Namibia.
South Africa relaxed its ban on air travel under level 3 of the national lockdown and has now allowed business travel.
However, leisure and international travel continue to be banned.
“Approximately 50% of our revenue is reliant on air-travel and as such the prohibition on all domestic and international travel has had a devasting impact on our business,” McGhee said.
This month, the Tourism Business Council of South Africa said the travel and tourism industry has lost more than R68 billion since the lockdown started in March.
Bidvest, whose businesses span freight, branded products, cars, financial services and commercial products, has been reviewing its business and could retrench workers across all its six division, impacting 3 395 jobs.
McGhee said the group’s priority is to save as many job as possible. The company would prefer to sell the car rental unit, rather than close it.
As such, the company is focusing on identifying a suitable investor.
Last month, the Brian Joffe-founded group released a trading update for the 10 months ending April in which it warned it had only generated half of the revenue it generated in the same period last year.