How To Quit BEST CAR RENTAL In 5 Days

The car rental industry is really a multi-billion dollar sector of the united states economy. The US segment of the industry averages about $18.5 billion in revenue a year. Today, there are approximately 1.9 million rental vehicles that service the united states segment of the market. In addition, there are several rental agencies aside from 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 possibility of economies of scale. Moreover, most 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 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 are relegated to the car or truck industry whereas the turn-around mileage was 12,000 to 15,000 miles five years ago. Due to slow industry growth and narrow profit percentage, there is absolutely no imminent threat to backward integration within the industry. 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 throughout the chain. On the vacation consumer?s end of the spectrum, competition is fierce not only because 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 established a network of dealers over 90 percent the leisure segment. On the corporate segment, alternatively, competition is very strong at the airports since that segment is under tight supervision by Hertz. As the industry underwent an enormous economic downfall recently, 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 on the list of major players take part 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 biggest 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. 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 miami car rental luxury , 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 a year for days gone by four years. Since 2002, the industry has began 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 another several years, the is expected to experience accelerated growth valued at $20.89 billion every year following 2008 “which equates to a CAGR of 2.7 % [increase] in the 2003-2008 period.?

Distribution

Over the past couple of 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. As a result of increasingly abundant amount of car rental locations in america, strategic and tactical approaches are considered so that you can insure proper distribution through the entire industry. Distribution occurs 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 that are conveniently located within most major roads and urban centers.

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