U.S. car-sharing company Zipcar has predicted a lower-than-anticipated first-quarter profit after the company increased marketing and other expenses to aid in the expansion of the business to Europe. The company disclosed that it will report a net loss of as much as $5 million in this quarter, typically its slowest.
Cambridge, Massachusetts-based Zipcar revealed that sales this quarter would be as much as $60 million, following behind the average $60.6 million approximation of three analysts that Bloomberg has surveyed. The company also anticipates costs of around $2 million this year in association with its European expansion including the establishment of European headquarters in the United Kingdom and last month's appointment of Frerk-Malte Feller as chief of European operations.
The Zipcar service enables members to rent vehicles by the hour. It is presently available in North America and in five cities in the United Kingdom. Last month, the company announced that it had bought a majority share in Barcelona-based Catalunya Carsharing, also known as Avancar, which operates a vehicle fleet throughout the cities of Sant Cugat del Valles and Barcelona.
Scott Griffith, chairman and CEO of Zipcar, stated that they are gaining momentum as they work to expand and grow the company's presence throughout Europe and the car sharing category, that to the completion of the transaction with the integration of their UK operations and the recent appointment of Frerk-Malte Feller. In addition, Zipcar stated that research by the consulting firm Frost & Sullivan had revealed that the market for vehicle sharing in Europe could reach 5.5 million members and revenues of 3 billion euros.