Future of cars is leasing, not owning, says Avis COO Tlhabi Ntlha

The car rental business is no longer what you and I imagined. It now blends and merges bespoke mobility solutions, a wider scope of products and information technology usage.

We chatted to Tlhabi Ntlha, the COO of Avis South Africa, about the new world of hiring cars.

Ntlha said her core task is to ensure that customers have the correct cars, at the right location, time and in the correct specification. Since 1946, when the company pioneered the car rental business model, it has polished the craft for short-term rentals and commercial clients. Nowadays it also panders to those who seek luxury and performance models such as Mercedes-AMG G63s, V-Classes and even Audi RS 6 wagons.

There are also off-road Safari rentals at the ready with all the weekend camping and mountaineering accoutrements fitted. Chauffeur-driven services are also offered, while long-term corporate clients include insurance companies that provide courtesy cars to customers, and municipalities that lease cars for 48-month contract periods.

Ntlha said the latter customers usually lease vehicles kitted out to individual specification, down to even a sunroof if they want.

When did this rental company mind-shift happen? The COO said globally, change happened about a decade ago, when consumers started being savvy with their mobility decisions, but Avis South Africa started shape-shifting into an integrated mobility solutions provider in 2020, in the middle of the Covid-19 pandemic when more than 30,000 cars were parked.

With South African consumers known for holding car ownership dear to their hearts, is this still the case? Nthla said this still holds true, but there are encouraging pockets of shifting views.

Those clients who are willing to do the research and compare leasing vs financing find compelling savings facets, such as integrated service and maintenance plans, interchangeability of cars at any time to suit arising and varied needs, and the clincher for me — a client not being liable for tyre replacements.

She said customers on long-term leasing contracts also benefit from two sets of replacement sets per year to use under normal wear and tear protocols, or in the case of accidental damage. She acknowledged that in some cases leasing remains pricier, but she is adamant that leasing is the more economic route in the long-run, with statistics showing that many of the new and financed cars are replaced within 36 months.

We have EVs on offer but interest in them is lower compared to the plug-in-hybrid electric vehicle. Perhaps it will be different some day, but I don't foresee EV fortunes changing soon

—  Tlhabi Ntlha, COO of Avis South Africa

With this reality, do customers really want to be locked into longer contracts, and shoulder the burden of paying more for specifications and other related costs to ownership such as insurance? She added that a car is still the bank’s property until it is fully paid up, anyway.

At this juncture it’s becoming evident there’s more to Avis than meets the rentals eye. Customers also use the rental companies to “review” new cars without long-term commitment, she said. Many would-be owners make purchase decisions after having rented and lived with a car for a few days, which is probably why many original equipment manufacturers (OEMs) clamour to have their cars on rental fleets. 

Could this mean the rental space is the unlikely treasure trove of South African consumer buying data and trends? Nthla said it is, and the slow uptake in South Africa of new-energy vehicles, especially the full-electric models, is also seen on their databases.

“We have EVs on offer but interest in them is lower compared to the plug-in-hybrid electric vehicle. Perhaps it will be different some day, but I don't foresee EV fortunes changing soon,” she said. 

AI changing demographics

This observation matches domestic EV sales, which totalled about 1,200 units in 2024. The trend of more plug-in-hybrid electrics arriving in South Africa this year also checks out, but what about the other new buzzword: artificial intelligence (AI)?

Ntlha said her company is implementing AI systems, and the benefits are numerous. AI will add to operational efficiencies and as the company evolves, so too will its offerings, which will include swifter engagement with a younger, more tech-savvy demographic, marketing of discounted car rentals, student specific leasing options or even car-sharing services, she said.    

A priority point for AI, though, is the ability to rapidly consolidate all the data at the company’s disposal to learn individual client product preferences, peak periods of rental, and also register the propensity of clients to experiment with vehicle choice and activities, priming Avis to prepare in time.

In a nutshell, AI will soon decipher and inform Avis that though you always attend the Durban July in a luxury bus, this year you may attend with just a plus one — and due to the warmer climes of the region, you may fancy a BMW M8 Convertible instead.