The Secret Of BEST CAR RENTAL

The car rental industry is a multi-billion dollar sector of the US economy. THE UNITED STATES segment of the industry averages about $18.5 billion in revenue a year. Today, you can find approximately 1.9 million rental vehicles that service the united states segment of the market. Furthermore, there are several rental agencies besides the industry leaders that subdivide the full total revenue, namely Dollar Thrifty, Budget and Vanguard. rentals car near me Unlike other mature service industries, the rental car industry is highly consolidated which naturally puts potential newbies at a cost-disadvantage given that they face high input costs with reduced possibility of economies of scale. Moreover, almost all of the profit is generated by way of 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 back. 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 used car industry whereas the turn-around mileage was 12,000 to 15,000 miles five years ago. Because of slow industry growth and narrow profit margin, 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 numerous factors that shape the competitive landscape of the automobile rental industry. Competition comes 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 corporate segment, however, competition is quite strong at the airports since that segment is under tight supervision by Hertz. Because the industry underwent a massive 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 a war-zone because so many rental agencies including Enterprise, Hertz and Avis among the major players take part in a battle of the fittest.

Growth

In the last five years, most firms have already been working towards enhancing their fleet sizes and increasing the amount of profitability. Enterprise currently the company with the largest fleet in the US has added 75,000 vehicles to its fleet since 2002 that assist 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. In addition, Avis has increased its fleet from 210,000 in 2002 to 220,000 despite recent economic adversities. Through the years following the economic downturn, although most companies throughout the industry were struggling, Enterprise among the industry leaders have been growing steadily. For example, 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 a 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. In accordance with industry analysts, the better 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 each year following 2008 “which equates to 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. Because of the increasingly abundant amount of car rental locations in america, strategic and tactical approaches are taken into account so as to insure proper distribution through the entire industry. Distribution takes place within two interrelated segments. On the corporate market, the cars are distributed to airports and hotel surroundings. On the leisure segment, alternatively, cars are distributed to agency owned facilities which are conveniently located within most major roads and urban centers.

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