Ho To (Do) BEST CAR RENTAL Without Leaving Your Office(House).

The car rental industry is a multi-billion dollar sector of the US economy. The US segment of the 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 numerous rental agencies aside from 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 minimal chance for economies of scale. Moreover, the majority 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 back. 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. Because of slow industry growth and narrow profit margin, there is 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 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 recently, it has upgraded the scale of competition within almost all 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 on the list of major players take part in a battle of the fittest.

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Over the past five years, most firms have already been working towards enhancing their fleet sizes and increasing the level of profitability. Enterprise currently the company with the biggest fleet in america has added 75,000 vehicles to its fleet since 2002 which help increase its amount 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. 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 depression, although most companies through the entire industry were struggling, Enterprise on the list of 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 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. 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 is likely 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 lot 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. Due to increasingly abundant number of car rental locations in the US, strategic and tactical approaches are taken into account 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, on the other hand, cars are distributed to agency owned facilities which are conveniently located within most major roads and urban centers.

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