All You Need To Know About the Car Rental Industry


In the US economy, the car rental industry is a multi-billion dollar sector. In one year, the US segment of the industry averages about $18.5 billion. The US segment of the market has been serves by approximately 1.9 million rental vehicles. To add up, aside from the industry leaders, there are also lots of rental agencies that subdivide the total revenue, it includes Dollar Thrifty, Budget and Vanguard. Potential new comers will have an advantage when it comes to cost since they will face high input costs with low possibility of economies of scale. Thus, this makes the car rental industry reinforced compared to other industries. To add up, Firms such as Avis, Hertz and enterprise are the firms who generate most of the profits. In the statistics conducted in the fiscal year of 2004, Avis generated $2.97 billion of total revenue, while Hertz came in the second highest generator having $5.2 billion. The firm who generated the most in the fiscal year of 2004 is the Enterprise having $7.4 billion in total revenue.

The level of integration is also important in the Rent Cars Adelaide industry. Compared to five years ago, the car rental industry already has a completely new environment today. Before the vehicles are relegated to the used car industry whereas the turn-around mileage was 12,000 to 15,000 miles five years ago, they are being rented until they can accumulate 20,000 to 30,000 miles. This study is from the Business Travel News. There is no imminent threat to backwards integration within the industry due to the slow industry growth and narrow profit margin. Among the industry players like the Enterprise, Hertz and Avis, only Hertz is vertically integrated through Ford.

With the success and competitive landscape of car rental industry, for sure there are many other industries that are competing with it. There are two main sources of chain where the competition came from. Competition if strong because competitors operate at a cost advantage along with smaller market shares since Enterprise has forms a group of dealers over 90 percent the leisure segment. Another reason why there is a strong competition is because the market is protected and safeguarded by industry leader Enterprise.  The Car Rental SA companies that survived from the massive economic downfall for the last years has experienced an extreme scale of competition. Thus, rental agencies including Enterprise, Hertz and Avis are at the zone of war among the major players involved in the competition.