BEST CAR RENTAL Is Essential For Your Success. Read This To Find Out Why

The car rental industry is a multi-billion dollar sector of the US economy. The US 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. 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 new comers 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 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 completely different environment than it did five years back. In accordance with 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. 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 lots of factors that shape the competitive landscape of the car 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 cost disadvantage alongside smaller market shares since Enterprise has established 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. As the industry underwent an enormous economic downfall in recent years, it has upgraded the scale of competition within the majority 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

Over the past five years, most firms have been working towards enhancing their fleet sizes and increasing the level of profitability. miami exotic rentals with the biggest fleet in america has added 75,000 vehicles to its fleet since 2002 which help 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 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 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 per year for the past four years. Since 2002, the has began 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 likely 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 america. As a result of increasingly abundant number of car rental locations in america, strategic and tactical approaches are taken into account in order to insure proper distribution throughout the industry. Distribution occurs within two interrelated segments. On the organization market, the cars are distributed to airports and hotel surroundings. On the leisure segment, however, cars are distributed to agency owned facilities that are conveniently located within most major roads and urban centers.