Sixti's Smart move set to make life more difficult for easyCar

The German car rental group Sixt is throwing down the gauntlet to Stelios Haji-Ioannou's easyCar with an offer to rent vehicles from as little as €5 (£3.50) a day.

The group is launching is Sixti internet rental operation across Europe, starting from 22 locations in the UK, Germany, Austria, Switzerland, France and the Netherlands.

Sixti will offer Mercedes-built Smart cars at rates starting at €5 a day and a larger alternative - such as a Ford Focus - for as little as €8 a day. As with easyCar, the rates that customers pay will depend on how many cars are available, and will vary according to the time of year and how far in advance people book.

Sixt's chairman, Erich Sixt, is predicting revenues of between €10m and €15m in the operation's first year. "We have analysed the market and have come to the conclusion that we can reach a new group of private customers with the Sixti brand," he said.

The operation is the first head-to-head rival for easyCar to be launched by a major rental group. Sixt is the largest car rental company in Germany and one of the top five in Europe. It is also one of the oldest, established 90 years ago with just seven cars and having survived the confiscation of its entire fleet by the German army in 1939.

EasyCar, which is part of Mr Haji-Ioannou's easyGroup, professed itself unconcerned by the competition.

"High-cost rental operators cannot hope to compete with a low-cost operator like easyCar," said a spokesman. "Sixti is no more than Sixt in drag and it still has to pay for the wardrobe."

However, the launch is sure to add to pressure on the easyGroup empire, which recently admitted it had lost more than £120m in the last four years, including £30m from easyCar.

Last month, Mr Haji-Ioannou publicly castigated his managers for a "catastrophic failure of cost control" within the organisation.