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Car renting: the safe harbour in the midst of uncertainty
In recent months, the European economy has surprised us with a faster and more robust recovery than anticipated, driven by an increase in disposable income and the expansion of external demand. In Portugal, companies are showing resilience, with levels of liquidity, capitalisation and profitability above expectations. However, one crucial sector of the European economy faces profound challenges: the car industry. Will this general recovery be enough to save the European automotive sector from an imminent crisis?
While the current scenario may seem encouraging, it is vital to recognise that the scars of the recent crises are still very visible. Investor confidence and productivity growth remain fragile. This economic uncertainty permeates the decisions of economic agents, and even if the economic structure shows resilience, we must ask ourselves: **what value does this resilience have for sectors such as the automobile industry? **
In 2024, five of the six largest manufacturers suffered alarming drops in market capitalisation, with brands such as Stellantis and BMW AG losing more than 30% of their value. The German car industry, the backbone of European production, is in trouble in the face of fierce international competition, especially from China. The Chinese car market represents a significant slice of the global market, with Chinese consumers increasingly opting for domestic car solutions, particularly electric vehicles. Meanwhile, Europe seems to be losing ground, a battle that until recently seemed to have been won, leaving us to ask: **is our industry doing enough to adapt to this new paradigm? **
One of the main obstacles facing Europe is the high cost of Battery Electric Vehicles (BEVs). Although they have lower running costs in the medium and long term, the initial price is still higher than that of fossil fuel vehicles (ICE), even with government subsidies. This disparity makes the transition to more sustainable mobility challenging, especially at a time when consumers are increasingly cautious, pressurised by unstable economic conditions and high interest rates.**The reality is that, for many, opting for a BEV still represents too high a risk. **
In times like these, when the car market is highly volatile, uncertain and technologically transformed, renting stands out as a safe haven that gives peace of mind to those who use it. As a car subscription model, renting includes all the services needed to use the car, such as preventive and corrective maintenance, tyre replacement, insurance with own damage cover, payment of IUC and even a replacement vehicle when necessary. And, at the end of the contract, you don't have to worry about whether you've made the right choice of car or whether it will be accepted on the second-hand market, as this is the responsibility of the rental company, which assumes the risk of the sale value at the end of the contract. All this, in exchange for a fixed monthly fee, over the period that best suits each individual.
In addition to the economic benefits, renting also proves to be a real facilitator of sustainable mobility. By covering the technological risk that holds back so many consumers, it opens up space for embracing new technologies and speeds up the transition. For this reason, renting is not just a smart financial choice, it's a responsible form of mobility that aligns with contemporary needs, positioning itself as a solution that embraces a more sustainable future.
