Zeda, the car rental, leasing, and sales group, is reaping the rewards of its strategy to shift the focus of its Avis fleet leasing business towards heavy commercial vehicles. This strategic move comes amid high demand for trucks in logistics, particularly due to Transnet’s rail challenges and the increased reliance on road freight by sectors such as mining, fast-moving consumer goods, and e-commerce.
- Zeda reported an impressive 44% growth in heavy commercial units in the year ending September. By evolving its fleet mix to include in-demand vehicles like bakkies and large fleet vehicles, Zeda capitalized on inefficiencies in the rail network and increased demand for road usage vehicles.
- The growth strategy implemented by Zeda yielded positive results, as evidenced by double-digit growth in its rental and leasing businesses. This growth was underpinned by increased rental activity and the successful implementation of the heavy commercial strategy.
- Zeda’s improved performance in the leasing business opened up new growth opportunities in differentiated sectors, such as healthcare and last-mile delivery. The company delivered its first batch of 10 electric trucks to a last-mile customer, signaling its commitment to embracing sustainable transportation solutions.
- Zeda believes it is well-positioned to capture more opportunities in both the long-haul and last-mile segments of the market, indicating optimism for future growth. The company expects to maintain its current growth trajectory and leverage its market position.
- Zeda’s culture of cost-containment initiatives and efforts to improve business process efficiencies contributed to achieving a 17% operating margin despite challenges faced in the used-car market and rising interest rates.
- Zeda’s strategy includes diversifying revenue streams by balancing discretionary services like inbound and domestic travel with contracted services such as subscription, insurance, and public and corporate travel. The company’s subscription model, known as iLease, offers an alternative to ownership and is aimed at individuals for 12-48 months, highlighting the company’s commitment to providing flexible mobility options.