The paralysis of rent-a-car businesses sinks the sale of new cars in the Islands

2020/08/04 15:03:02 Written by Canarian Weekly Business

The registrations of cars and SUVs decreased in July in the Canary Islands by 48.49% compared to the same month of 2019, which is the worst figure in all of Spain.  So far this year, the fall has reached 52.9%, largely due to the collapse of the rent-a-car trade after the closure of borders and the obligatory zero tourism since March.

This market accounts for between 25 and 30% of the total sales for dealers in the islands, and in July the sales operations in this sector fell with figures of higher than 92%, while in company and private cars it was 16.4% and 13.96% respectively.

Against the negative figure in the Archipelago, the national average is positive, with a rise last month of 1.1%, and except Murcia with a negative 27.6%, all communities are below 5%, nine of them recording an increase in data.

By province, car sales in Las Palmas de Gran Canaria fell 62% and SUVs by 47% and in Santa Cruz de Tenerife the fall was 32% and 26.7%.

The regional federation of importers and dealers of the Canary Islands (Fredica), stress that the enormous dependence of the island economy on tourism, and the current situation of economic uncertainty may be paralyzing decisions to purchase new vehicles, and redirecting sales to the used vehicle market, even more so when the need for liquidity on the part of rental companies has increased supply.  This, stresses the employers, would explain the disparate result of the registration of the Canary Islands compared to the rest of Spanish communities.

For its part, Aconauto emphasizes the damage that the delay by the Canary Islands Government in approving its own Moves Plan is causing for the sector, as the Basque Country and Navarra have done.  In fact, these have registered an increase in registrations of 34.1% and 21.23%, respectively, in July.