The vehicle rental industry is a multi-billion dollar sector of the US economy. The US segment of a averages about $18.5 billion in revenue a year. Today, there are approximately 1.9 million rental vehicles that service the US segment of the market. Additionally, there are lots of rental agencies besides a leaders that subdivide the Rental mobil di surabaya 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 simply because they face high input costs with reduced likelihood of economies of scale. Moreover, a lot of the profit is generated with 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 different environment than it did five years ago. Based on Business Travel News, vehicles are being rented until they have accumulated 20,000 to 30,000 miles until they are relegated to the used car industry whereas the turn-around mileage was 12,000 to 15,000 miles five years ago. Due to slow industry growth and narrow profit margin, there's no imminent threat to backward integration within the industry. In fact, among a 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 chain. On the vacation consumer's end of the spectrum, competition is fierce not merely because the marketplace is saturated and well guarded by industry leader Enterprise, but competitors operate at a high price disadvantage along side smaller market shares since Enterprise has established a network of dealers over 90 percent the leisure segment. On the corporate segment, on one other hand, competition is very good at the airports since that segment is under tight supervision by Hertz. Because a underwent a massive economic downfall in recent years, 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 among the major players engage in a battle of the fittest.
Over the past five years, most firms have now been working towards enhancing their fleet sizes and increasing the amount of profitability. Enterprise currently the company with the greatest 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, on one other hand, has added 25,000 vehicles and broadened its international presence in 150 counties in place of 140 in 2002. Additionally, Avis has increased its fleet from 210,000 in 2002 to 220,000 despite recent economic adversities. Over the years following the economic downturn, although most companies throughout a were struggling, Enterprise among a 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 annually for yesteryear four years. Since 2002, a has started to regain its footing in the sector as overall sales grew from $17.9 billion to $18.2 billion in 2003. Based on industry analysts, the greater days of the rental car industry have yet to come. Over the span of another a long period, a is expected to have 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 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. Because of the increasingly abundant amount of car rental locations in the US, strategic and tactical approaches are taken into account in order to insure proper distribution through 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, on one other hand, cars are distributed to agency owned facilities which are conveniently located within most major roads and metropolitan areas.