Here Is What You Should Do For Your 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 per year. Today, there are approximately 1.9 million rental vehicles that service the US segment of the market. In addition, there are lots of rental agencies besides the industry leaders that subdivide the full total revenue, namely Dollar Thrifty, Budget and Vanguard. 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 minimal possibility of 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 altogether 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 being rented until they will 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. Due to slow industry growth and narrow profit percentage, there is absolutely no imminent threat to backward integration within the industry. In fact, on the list of industry players only Hertz is vertically integrated through Ford.
Scope of Competition
There are lots of factors that shape the competitive landscape of the automobile 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 only as the market is saturated and well guarded by industry leader Enterprise, but competitors operate at a cost disadvantage along with smaller market shares since Enterprise has established a network of dealers over 90 percent the leisure segment. On the corporate segment, on the other hand, 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 almost all 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 on the list of major players engage in a battle of the fittest.
Over the past five years, most firms have been working towards enhancing their fleet sizes and increasing the level of profitability. Enterprise currently the company with the largest fleet in america has added 75,000 vehicles to its fleet since 2002 that assist increase its number of facilities to 170 at the airports. Hertz, on the other hand, has added 25,000 vehicles and broadened its international presence in 150 counties instead of 140 in 2002. Furthermore, Avis has increased its fleet from 210,000 in 2002 to 220,000 despite recent economic adversities. Over the years following the economic depression, although most companies through the entire industry were struggling, Enterprise among the industry leaders had 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 right into a growth rate of 7.2 percent per year for days gone by four years. Since 2002, the industry 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 another several years, the 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.?
Over the past few years the rental car industry has made a great deal of progress to facilitate it distribution processes. Today, there are 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 considered so as to insure proper distribution throughout the industry. Distribution occurs within two interrelated segments. Car Rental Dalaman Airport 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 that are conveniently located within most major roads and metropolitan areas.