Budget Saudi’s fleet occupancy rates outstanding; tax on used car profit margin to be positive: CEO

United International Transportation Co. (Budget Saudi) outstanding fleet occupancy rates compared to the sector, with short-term leasing being the main reason for improved results during the first quarter of 2023 year-on-year (YoY), CEO Fawaz Danish told Argaam in an interview.

The occupancy rate in the short-term car rental segment reached more than 65%, while the long-term rental segment achieved more than 90% in Q1 2023, the CEO added.

He pointed out that the long-term rental had a positive impact and contributed to the improvement in performance during the first quarter, as selling used cars contributed about 25% to the company's profit compared to 75% from short- and long-term leasing.

The growth of the Saudi economy, higher air traffic, growing number of passengers and increasing attractions for tourists positively led to higher fleet occupancy rate, particularly the short-term lease segment.

Danish also stated that the company began to form a fleet of cars with the types of cars most in demand, noting that it accomplished an increase in the number of cars and the percentage of operation.

Concerning the impact of calculating VAT on the profit margin of selling used cars, he said that it will positively affect the demand for used cars in the Saudi market, as the implementation of the decision will reduce the final value on the end consumers.

According to data available on Argaam, Budget Saudi’s profit rose 15% to SAR 69.3 million in Q1 2023, compared to SAR 60.3 million in Q1 2022.