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The Next 3 Things To Immediately Do About BEST CAR RENTAL

The car rental industry is 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. เช่ารถสนามบินนครศรีธรรมราช Today, you can find approximately 1.9 million rental vehicles that service the US segment of the market. Furthermore, 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 reduced chance for economies of scale. Moreover, a lot 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 back. According to Business Travel News, vehicles are increasingly 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 margin, 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 many factors that shape the competitive landscape of the automobile 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 alongside smaller market shares since Enterprise has generated 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 a massive 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 as most rental agencies including Enterprise, Hertz and Avis among the major players engage in a battle of the fittest.

Growth

In the last 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 the US has added 75,000 vehicles to its fleet since 2002 that assist increase its amount of facilities to 170 at the airports. Hertz, however, has added 25,000 vehicles and broadened its international presence in 150 counties instead of 140 in 2002. In addition, Avis has increased its fleet from 210,000 in 2002 to 220,000 despite recent economic adversities. Over time following the economic depression, although most companies throughout the industry were struggling, Enterprise among the industry leaders had been growing steadily. For instance, 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 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 better days of the rental car industry have yet ahead. 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 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 america. Due to the increasingly abundant amount of car rental locations in america, strategic and tactical approaches are taken into account in order to insure proper distribution throughout the 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, however, cars are distributed to agency owned facilities that are conveniently located within most major roads and metropolitan areas.