10 Tips That Will Make You Influential In BEST CAR RENTAL

The car rental industry is a multi-billion dollar sector of the US economy. THE UNITED STATES segment of the averages about $18.5 billion in revenue per year. Today, you can find approximately 1.9 million rental vehicles that service the united states segment of the market. Furthermore, there are many rental agencies besides the industry leaders that subdivide the total revenue, namely Dollar Thrifty, Budget and Vanguard. Unlike other mature service industries, the rental car industry is highly consolidated which naturally puts potential new comers at a cost-disadvantage given that they face high input costs with reduced chance for economies of scale. Moreover, most of the profit is generated by a few firms including Enterprise, Hertz and Avis. For the fiscal year of 2004, Enterprise generated $7.4 billion in total revenue. Hertz came in second position with about $5.2 billion and Avis with $2.97 in revenue.

Level of Integration

The rental car industry faces a totally different environment than it did five years ago. According to Business Travel News, vehicles are increasingly being rented until they have accumulated 20,000 to 30,000 miles until they’re relegated to the car or truck industry whereas the turn-around mileage was 12,000 to 15,000 miles five years back. Because of slow industry growth and narrow profit percentage, there is absolutely no imminent threat to backward integration within the. In fact, among the industry players only Hertz is vertically integrated through Ford.

Scope of Competition

There are several factors that shape the competitive landscape of the car rental industry. Competition originates from two main sources through the entire chain. On the vacation consumer?s end of the spectrum, competition is fierce not merely as the market is saturated and well guarded by industry leader Enterprise, but competitors operate at a price disadvantage along with smaller market shares since Enterprise has generated a network of dealers over 90 percent the leisure segment. On the organization segment, however, competition is quite strong at the airports since that segment is under tight supervision by Hertz. Because the industry underwent an enormous economic downfall in recent years, it has upgraded the scale of competition within a lot of the companies that survived. Competitively speaking, the rental car industry is really a war-zone as most rental agencies including Enterprise, Hertz and Avis among the major players engage in a battle of the fittest.

Growth

Over the past five years, most firms have already been working towards enhancing their fleet sizes and increasing the amount of profitability. Enterprise the company with the largest fleet in the US has added 75,000 vehicles to its fleet since 2002 which help increase its number of facilities to 170 at the airports. Hertz, however, has added 25,000 vehicles and broadened its international presence in 150 counties as opposed to 140 in 2002. Furthermore, Avis has increased its fleet from 210,000 in 2002 to 220,000 despite recent economic adversities. Over time following the economic depression, although most companies through the entire industry were struggling, Enterprise on the list of industry leaders have been growing steadily. For instance, annual sales reached $6.3 in 2001, $6.5 in 2002, $6.9 in 2003 and $7.4 billion in 2004 which translated into a growth rate of 7.2 percent per year for days gone by four years. Since 2002, the has started to regain its footing in the sector as overall sales grew from $17.9 billion to $18.2 billion in 2003. According to industry analysts, the higher days of the rental car industry have yet to come. Over the course of the next several years, the industry is expected to experience accelerated growth valued at $20.89 billion every year following 2008 “which compatible a CAGR of 2.7 % [increase] in the 2003-2008 period.?

Distribution

Over the past few years the rental car industry has made a great deal of progress to facilitate it distribution processes. Today, you can find approximately 19,000 rental locations yielding about 1.9 million rental cars in the US. Due to the increasingly abundant number of car rental locations in america, strategic and tactical approaches are taken into account as a way to insure proper distribution throughout the industry. Distribution occurs within two interrelated segments. On the corporate market, the cars are distributed to airports and hotel surroundings. On luxury car rental miami , however, cars are distributed to agency owned facilities which are conveniently located within most major roads and urban centers.

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