Developments at iconic rental car brand Hertz in the US would have warned local investors in mobility stocks to brace themselves for effects of Covid-19.
Last week Motus reported that the severe effects of the lockdown meant reducing the vehicle rental fleet by 40%, and a retrenchment process to reduce the workforce by at least half. Motus will also close 20 branches.
In its just released annual report, Combined Motor Holdings (CMH) said its car rental segment presented the highest risk exposure to the Covid-19 contagion.
CMH noted: “It was the earliest affected, is the most severely affected, and is likely to be the slowest to return to some form of normality.”
The asset risk for CMH (and Motus too) lies in the car hire fleet. CMH reckoned the downsizing of the fleet could take three to four months.
Fortunately the relinquished rental fleet will be sold through CMH’s used car dealership — so there is some offset. With additional stock on the floor of used car dealerships, there might be an incentive to price vehicles to go. In other words, there might not be a better time to shop for a reliable second-hand car.
CMH said most of the rental vehicles are affordable models — less than 18 months old with low mileage.
Over the past two months the rental fleet has been reduced by almost 15%, and is likely — after business resumes — to be further reduced by 2%-3%, a week until the optimum level is reached.
The CMH’s car rental staff numbers have been cut by 15% and another 15%-20% reduction is anticipated over the coming months.
Clearly, this is going to be a long, hard road to recovery.
Eleven years on and Popi is finally being implemented
Companies around the country may see their costs rising in an effort to comply with the long-awaited Protection of Personal Information (Popi) Act.
It sometimes feel like we’ve been talking about Popi forever, but it’s only been 11 years.
Expected to have come into effect on April 1 2020, the legislation will be in force from July 1, just a week away. Both businesses and consumers are affected by the new laws.
The delay, however, does not take away from the importance of the Act, which seeks to address and ensure greater security of data and privacy in an increasingly digitalised world.
SA has the third-highest number of cybercrime victims in the world with about R2.2bn lost each year through fraudulent activities carried via the internet, according to professional services company Accenture.
Businesses have one year within which to comply, with legal experts warning that the compliance process is complex, time consuming and business leaders are urged to start the journey quickly.
Among a host items, between July 2020 and July 2021, businesses will need to: identify what personal information their businesses collect, from whom and where it is stored; analyse their operations to identify digital security risks; redo direct marketing communication; provide compliance training and policies to staff; review IT security and physical security; and amend contracts to include Popi compliance clauses.
In addition, the legislation puts an onus on executives with the CEO or head of the company automatically deemed to be the information officer under Popi, meaning they are ultimately responsible for the data collected by the organisation.
Law firms may have extra work on their hands trying to help businesses to comply but what will be interesting to see is how this affects company bottom lines in the next 12 months.
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