Morocco’s Car Rental Industry Faces Crisis as Bookings Plummet

Morocco has "10,500 car rental agencies employing 30,000 people". The total vehicle fleet available to rental companies reaches a total of 140,000 cars. The situation is so complicated that some agencies have chosen to close down while others are trying to survive.

According to Mohamed Alami, president of the Association of Automobile Rental Companies without Drivers in Morocco (ALASCAM), "more than 60% of car rental agencies will file for bankruptcy and almost 90% are in default. That is to say, they have stopped paying their suppliers, credit agencies and banks. Also, more than 6,000 cases are before the courts and the process of recovering vehicles by finance companies is underway," says Aujourd’hui le Maroc.

The situation in this sector is really catastrophic, for the simple reason that during the confinement period, there are more expenses and zero cash inflows. Even worse, most of the cars rented before the confinement have not been returned, creating a loss of income for the agencies. After the lifting of the confinement, the promoters of the agencies had thought that the business would pick up, especially with Eid al-Adha.

But the ban on travel between cities has dampened the hopes of what seemed to be a take-off. "All the people who had booked cars for Eid had canceled because people no longer knew whether they should travel or not. This caused total upheaval," says Mohamed Alami. "Between 15,000 and 20,000 people could become unemployed, not to mention the companies that will simply close down," says the president of the Association of Automobile Rental Companies without Drivers in Morocco. To this is added the suspension of the 2,000 DH aid that employees in the sector could benefit from.

Among the short-term proposals suggested by ALASCAM to the Ministry of Equipment, Transport, Logistics and Water, there is the one to authorize rental companies during this critical period to switch from "self-drive" car rental to "with driver" rental. For car rental companies, it is essential to find "alternatives capable of allowing them to generate turnover in order to cover the debts, including the 3-month insurance that has accumulated despite the crisis," according to Mohamed Alami. There are also "the loans whose interest rates are high even when deferrals are granted," according to the same source.

On the list of urgent crisis exit proposals, car rental companies recommend completely liberalizing the market to allow them, for example, to have less than 5 cars in their fleet, which is the minimum required in the specifications, the same source specifies.