Rental Cars Slowly Going Green

(AP) The car rental business is slowly undergoing a green evolution, packing its fleets with more hybrids and fuel efficient vehicles.

But so far, it's been a cautious transition, since there's no telling whether consumer demand will meet the supply.

Enterprise Rent-A-Car, the nation's largest car rental company, launched one of its more ambitious efforts Wednesday, opening four new "green branches" in Atlanta. About 60 percent of the vehicles at the chain's stores will be hybrids or other fuel-efficient vehicles.

The company said it's a response to the consumer demand in Atlanta, which may reflect gas prices that could reach $4 per gallon this summer.

Other rental giants also say they're trying to keep pace with a growing appetite for environmentally-friendly cars.

Analysts, though, say it's still unclear how fast the trend will grow. They say much of the consumer demand now comes from environmentally-conscious customers and others looking for an extended test drive before they buy a hybrid.

"Those who are looking for a value in terms of dollar for dollar will absolutely not get hybrids," said Brian Chee, the head automotive analyst at MyRide.com. But he said there's a growing market that's willing to shell out an extra $40 for the hybrids during quick vacations.

And some wonder whether consumers will be willing to dish out premiums that typically range from $5 to $15 a day for a hybrid. The premiums could outstrip fuel savings on short-term rentals.

"At the end of the day, it's the consumer that drives rental fleeting," said Neil Abrams, president of Abrams Consulting Group Inc., a rental car industry consultancy. "Rental car companies can buy a lot of cars their customers don't want to drive, and they'll be sitting in a lot and gathering dust."

Enterprise has slowly built up its hybrid fleet, boasting 4,000 of the vehicles in its fleet of 1.1 million.

Rivals are adding to their environmentally-friendly offerings, too.

Hertz Global Holdings Inc. said it will have spent $68 million to add 3,500 Toyota Prius hybrids by the start of the summer. And Avis Budget Group Inc. spokesman John Barrows said his company now offers 2,500 hybrids.

But the numbers seem meager compared with the nation's total rental fleet of 1.8 million vehicles.

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