During the Eid Al-Adha holiday period, many customers were unable to find rental cars to travel and celebrate the occasion with their families, regardless of the price they were willing to pay. At first glance, this would suggest a booming market.The summer holiday season, which will begin for many travelers in the coming days, is traditionally characterized by strong demand for rental vehicles over varying lengths of time. In reality, however, when a customer cannot secure a rental vehicle, it does not necessarily mean that no cars are available. According to industry professionals, car rental companies generally require either a credit card or a debit card with sufficient funds to cover the rental cost and any potential damage to the vehicle. This requirement remains a major obstacle for many customers.As a result, the apparent strength of the market may be misleading.The Federation of Self-Drive Car Rental Companies (Flascam) takes a far less optimistic view and openly describes the sector as being in difficulty.Tarik Dbilij, President of Flascam, is unequivocal: «The results of the Eid Al-Adha period were disappointing. More generally, the sector has been facing difficult conditions for several years. Price competition is intensifying, profit margins are disappearing, and many companies are struggling to meet their financial obligations. What further aggravates the situation is the boom in the creation of new car rental businesses.Many entrepreneurs enter the market simply because others have done so. In some areas, such as the city of Nouaceur, rental companies are clustered within a very small radius. The barriers to entry are relatively low. Renting a commercial space and purchasing seven vehicles is sufficient to launch operations. With a minimum capital investment of around MAD 500,000, entry conditions are considered highly accessible. According to the Federation, the roots of the problem are numerous and must be examined from within the industry itself. A trend that has emerged in recent years is the rapid acquisition of vehicles without proper economic analysis. «Some operators have multiplied vehicle purchases without conducting a genuine economic assessment, convinced that expanding their fleet automatically guarantees business growth. Today, we see that the market can no longer absorb all the capacity being put into circulation. Purchasing a vehicle should be a rational decision based on realistic projections regarding occupancy rates, profitability, and repayment capacity. Buying simply for the sake of buying is not a strategy», explains the Federation’s president.The Beginning of Financial Imbalances. The uncontrolled multiplication of vehicle purchases is often the starting point of financial imbalances that eventually affect the entire sector. In many cases, these acquisitions are financed through bank loans. This is why the Federation is warning financing institutions about what it describes as «an increasingly worrying phenomenon». The issue concerns the growing number of new companies being created by individuals who have already accumulated significant debts through previous businesses.Although this practice is not unique to the car rental sector, it affects many industries. The underlying model consists of heavily indebting one company before creating another entity and repeating the process.This partly explains why tens of thousands of new companies are established every year despite having little or no genuine economic activity.The Federation has taken note of this practice:«Changing a company’s name or using relatives as shareholders does not transform a poor manager into a competent entrepreneur. Financing should support viable projects and responsible professionals, not fuel a permanent cycle of debt accumulation and business failure».Hassan EL ARIF