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Avis' Unit Expands in Spain

Zacks Equity Research

Consistent with its goal of making its presence felt globally, Budget Car Rental – a unit of Avis Budget Group Inc. (CAR) – has swarmed the Spanish rental services market by opening 60 new car rental units through the first half of 2012. This expansion brought the company’s Spanish Budget locations to 99.

Budget brand’s lack of strong positioning in Europe compelled Avis to expand its presence in Spain by this magnitude. As a result, the company is now emphasizing on expanding its network in the Europe, Middle East and Africa (:EMEA) belt to better serve leisure travelers seeking value.

Looking ahead, the company anticipates opening 25 more facilities in Spain through the rest of 2012. The expansion of its footprint in Spain is expected to boost the company’s bookings as well as drive sustained, profitable growth across the EMEA region.

Budget Spain serves value-conscious business and leisure travelers’ at 34 major airports and in convenient locations in metropolitan areas, including Barcelona, Madrid, Palma de Mallorca and Seville. Budget's car rental fleet in Spain offers quality, well-maintained vehicles with manual and automatic transmissions from a variety of manufacturers. Budget Spain also offers travelers global positioning system (GPS) navigation devices, child safety seats, vehicle damage coverage options and personal property protection packages.

Budget Car Rental is a globally recognized car rental brand serving more than 3,000 locations in over 120 countries.

Avis Budget Group is the leading vehicle rental company in North America, Australia and New Zealand. A formidable network of more than 10,000 rental locations and 350,000 vehicles enable the company to strengthen its well-established position in a highly competitive vehicle rental industry.

The company faces intense competition from other established players, such as Hertz Global Holdings Inc. (HTZ), Enterprise Rent-A-Car, Dollar Thrifty Automotive Group Inc. (DTG) and Ryder System Inc. (R).

We maintain our long-term ‘Neutral’ recommendation on Avis Budget. However, the company has a Zacks #4 Rank, implying a short-term Sell rating.

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