Eighteen years ago, after resigning from one of the biggest car rental companies to start a new job elsewhere, Grenville Salmon decided to start a similar business as a side hustle.
“Pace Car Rental started with a dream, no funding and one borrowed car,” he said.
Salmon acquired a Toyota Quantum minibus, aiming to get into the tour operator business, but that did not work out as planned as the customers he was aiming for did not want to rent the vehicle.
He later devised a plan to swap cars with his mother. “My car had a high mileage, so I gave it to my mum and rented out her car.”
This sparked an idea, and he started rallying friends and family to rent out their cars to him. This is how the first version of the Pace fleet was built. In the first year of business, Pace managed to acquire six vehicles, bought using Salmon's savings and money from the rental of the Quantum, which was later sold. All the cars were bought at auctions.
“My wife quit her job to run the company while I continued working. Every night after I knocked off, I would do the books and marketing of the business and that carried on for six and a half years. I then resigned to focus on the business.”
Salmon said in the early days, the “only way we could get customers was advertising on Gumtree”.
Pace Car Rental became the first rental company to offer cash-based car rentals without the requirement of a credit card. Salmon said most of their clients were loyal and returned the cars.
“Our target market did not have credit cards but had debit cards. My wife and I did employment and next of kin verifications. It was also expensive to install tracking devices in cars at that time. We just prayed that clients would return the cars.”
He said there were a few incidents when customers did not return cars, but those were always recovered by police. “But with advancement in technology, now we can remotely switch off the cars if a customer has not paid,” said Salmon.
It was after the Soccer World Cup in 2010 that the company received a major boost.
“It was four years into the business that we made a big enough profit for the banks to give us a loan. It took four years to get that critical mass to get funding.”
At that time, Pace had increased its fleet to 37 cars. The loan was used to add more vehicles.
“My wife and I had no clue what we were building.”
Half of our customer base is individuals looking for long-term rentals. Some of them are unable to secure bank loans, not that they can’t afford [repayments] but their credit score is low, so renting becomes a better alternative for them
— Grenville Salmon, Pace Auto Group CEO
Pace Rentals now has a fleet of 5,000 vehicles, including cars, bakkies and commercial vehicles. It operates eight branches in Pretoria, Johannesburg, Umhlanga, East London, Gqeberha, and Cape Town and employs 300 people. The company comprises Pace Car Rental, Pace Car Risk, Pace Autobody and Pace Auto Services.
It has also built a strong client base that includes local and international film companies, long-term visitors, rent-to-buy customers and Uber drivers.
“Half of our customer base is individuals looking for long-term rentals. Some of them are unable to secure bank loans, not that they can’t afford [repayments] but their credit score is low, so renting becomes a better alternative for them.”
Salmon said the industry is competitive, and customers are always looking for the cheapest price.
“When we started it was very profitable, and now everybody has hopped onto the long-term rental market. If you don’t have a lot of cars, it's not easy to make a profit. We also have to find new places.”
Access to airports is key to the company's strategy of targeting corporate and private travellers. However, prime space at major airports has belonged to the big players in the rental market for more than a decade. Salmon decries what he calls a “monopoly”.
“There has not been a new tender for the past 17 years. There was a problem with the tender seven years ago, and it was never awarded. So people who got in 10 years before that are still there. It's a monopoly at the moment. If you are not at the airport, it's not easy to attract tourists. We do deliveries to the airport and have good service there now. We meet clients at the public parking area. It's not as easy as having an office at the airport. It's difficult.”
He said a new tender was expected to be published this year.
Pace Car Rental wants to add offices in Soweto and Mbombela to its portfolio.
“We believe Soweto, in particular, could be a big market for us. We are always looking to expand, but we have to time it right.”
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