Automotive rental and leasing giant Hertz opened an office at Borispol Airport Monday, marking the start of its operations in Ukraine.
'The time to move into Ukraine is now,' said Hertz Ukraine Managing Director Geoffrey Berlin. 'I have always been optimistic about the potential of this country.' Hertz already operates franchises in many smaller former Communist bloc countries, including Croatia, Romania, and Azerbaijan. International competitors Avis and Europcar and over a half a dozen Ukrainian rental companies already operate in Kyiv.
Airport management hailed Hertz's arrival as a sign that Ukaine's long-stalled economy is on the road to recovery. 'We are very glad that Hertz is here,' said Borispol Airport First Deputy General Director Boris Shakhsuvarov. 'It's another step towards a more developed, civilized Ukraine.'
A group of local and foreign entrepreneurs, including Estonia-based Balticar, bought both the rights to operate under the Hertz name and the vehicles and space at the airport last autumn.
The office expects to be operating 20 American, Korean, and German sedans by the end of the month. All were bought outright from local car dealers. Eighty percent of the start-up fleet are Fords.
'We purchased vehicles based on which dealer made us the best offer,' said Berlin. 'That's both in terms of price and service agreement.'
The franchise's vehicles will be rented for one year to eighteen months, before being sold on the private market, Berlin said.
A top-of the line Opel Omega will cost a maximum of $92 a day and $0.92 per kilometer. A budget Hyundai Accent or Ford Escort will be a little more than half that, at $54 a day and $0.54 for each kilometer clocked.
All vehicles are available with drivers for approximately three times the basic rates, while renting by the month rates an average 35 percent discount. Optional collision, theft and personal accident insurance tacks on from $26 to $40 to the daily rental bill.
Hertz-Ukraine's rates are significantly higher than those offered by the company's franchises in Western European countries. The weekly prepaid rate for Italy is $309 (Economy), while the rate in Germany is $72 (Mini), according to the company's web page.
Berlin, however, said the company's rates in Ukraine are below those it charges in Moscow, and comparable to those elsewhere in Eastern Europe.
He acknowledged that Hertz charges more than freelance drivers with their own imported cars, but stressed the firm's service standards.
Berlin said the franchise is targeting local customers rather than just the accidental tourist.
'There is a limited supply of imported cars with reliable drivers, at a time when demand for them is growing,' he said.
The company's customer base is expected to be split roughly 50-50 between corporate clients and private individuals. 'It really doesn't matter whether the [private] customers are from the West or the former Soviet Union,' said a Hertz Ukraine customer service specialist. 'The point is that they have credit cards.'
