Mary Hanafin (Dún Laoghaire, Fianna Fail)

I have received a number of representations from the car rental industry seeking support for the provision of additional car hire capacity in 2010. The matter was also raised with me at meetings with the Irish Hotels Federation and the Irish Tourist Industry Confederation on 1 April and 13 April, respectively. The concerns expressed to me relate mainly to the availability of automatic transmission cars in the traditional summer peak season, chiefly with the American market in mind.

From a tourism perspective, the main concern is the availability of cars and the price consumers must pay. In that regard, my Department and the tourism agencies have been monitoring the situation closely with regard to its possible impact on visitors from overseas. Tourism Ireland has examined the situation and advises me that tour operators in Great Britain, France and the Netherlands have reported no concerns regarding availability of automatic or manual cars for hire in Ireland for the summer season. In Germany, I understand that tour operators such as DerTour, which have reported a rise in car rental bookings compared to last year, have been advising consumers to book the car hire element of their holiday early. One smaller tour operator has reported a drop in car rentals booking this summer, citing high prices as a reason. In the United States, where the availability of automatic cars is particularly important, I understand that tour operators that have long-established relationships with car rental companies in Ireland have to date reported no problems in respect of the availability or price of cars.

As part of its own monitoring exercise, the Department conducted a web-based survey of car hire on Tuesday, 11 May, which examined the availability of cars for rental in July and August. The key finding in the survey was that every car rental company with one exception had several types of auto transmission cars available for rent for every week in July and August. In all cases except one, there were three to four types of auto transmission car available. While the survey concentrated specifically on data on automatic transmission cars, every one of the companies researched also had a wide selection of manual transmission cars during the weeks in question. Prices in the May survey did not vary significantly from an earlier similar survey carried out by my Department in March. While I accept that as the summer peak season approaches, the position may change as regards availability, it is difficult at this stage to gauge the precise market outlook given uncertainty as regards supply and demand.

Additional information not provided on the floor of the House.

Although I have received representations urging Government intervention, I have also received a number of approaches, both from within the car hire industry itself and the wider tourism sector against such a course of action. In these cases, the view is that the potential shortages may not be as extensive as suggested and the market should take its course. As I have stated previously, it may well be that the existing car rental business model, which is dependent on a high turnover of new car sales, is no longer appropriate in the current market and must be adapted to changed circumstances.

Taking all this into account, I continue to consult with the Minister for Finance regarding the options open to the Government if State intervention is considered necessary. For State intervention to be warranted, there would have to be clear evidence of market failure and the prospect that any intervention would result in incremental hire vehicles coming onto the market, and remaining in place, to deal with potential peak demand in 2010 and later years. I will continue to engage with the sector and monitor developments closely with a view to taking a very early decision on the issue.

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