In recent years, the rental car industry has made progress, much easier to make the process of distribution. Today there are approximately 19,000 rental locations producing about 1.9 million cars in the United States. Due to the increasingly rich car rental locations in the United States, strategic and tactical approaches to be taken into accountEnsure adequate distribution of the entire industry. The distribution is effected within two connected line segments. On the corporate market, the cars at the airports and the Hotel are prevalent. In the leisure segment, on the other hand, are cars that agencies have structures that can be found in larger metropolitan roads and distributed.
In the past, the operator uses the car rental companies in order to gut-feeling or intuitive decisions depend on assumptionsHow to keep a certain number of vehicles in the fleet or the use and performance in some cars have a fleet. With this method was not very balanced, the level of consumer demand and maintain the desired level of return. The distribution method is relatively simple in the industry. First, managers must determine the number of cars in its inventory on a daily basis should be on. Since a very large problemarises when too many or not enough machines are available, including car Hertz, Enterprise, and Avis, use a "pool" which is a group of independent car rental services that share a fleet of vehicles. In essence, the pools available to rent offices to operate more efficiently by reducing the risk of low stock car or even eliminate bottlenecks.
Market Segmentation
Most companies in the sector, gain the type of car basedhire. The car economy, compact, ordered intermediate, premium and luxury. Among the five categories, the income from the commercial sector will benefit the most. For example, the economy segment is solely responsible for 37.7 percent of total market revenue in 2004. Furthermore, the compact segment made for 32.3 percent of total sales. The rest of the other categories include the remaining 30 percent for the segment of the United States.
historic levels of profitability
TheProfitability in the automotive sector has declined in recent years. Over the past five years, the industry, the travel industry as the rest of the fight. In fact, lived between 2001 and 2003, the U.S. market, a moderate reduction in the level of profitability. In particular, sales fell to $ 19400000000 2000-18200000000 dollars in 2001. Subsequently, the entire industry more than $ 17,900,000,000 in revenue erodes2002, an amount slightly more than 17.7 billion dollars, which is the total revenue for the year 1999. In 2003, the industry has suffered material gain just brought the billion to $ 18.2. Consequence of the economic crisis in recent years, the younger players as they are highly dependent on air transport sector strategy to reorganize some adversity as a way to prepare companies to meet their economic lot done, which may at anySurrounding area. In 2004, on the other hand, the economic situation of most companies have improved after years in the industry as most landowners were returned greater profits far from the front. For example, Enterprise has an annual turnover of $ 7400000000; returned Hertz and Avis sales of $ 5200000000 $ 2900000000 with revenues for fiscal year 2004. According to analysts, is the rental car industry expects a steady growth of 2.6 percent of revenue in the coming years of experience, reflected in higher profits.
competitive rivalry among sellers
There are many factors that affect competition within the car rental industry. In recent years expanded the fleet size and increase in profitability was the focus of most companies, car rental. Enterprise, Hertz and Avis are among the leaders in both sales growthFleet size. Moreover, strong competition, as companies are constantly trying to improve their current conditions and offer more to consumers. Enterprise has nearly the size of the fleet from 1993 to about 600,000 vehicles doubled today. Because the industry is working on such tight profit margins, competitive prices is important, but most companies are actively involved in the creation and delivery of values from a range of services of gadgets, including rent-freeCustomer satisfaction. Hertz, for example, integrated its Never-Lost GPS system in his car. Enterprise, on the other side uses sophisticated yield management software to manage their fleets.
Finally, using its OnStar system Skynet Avis and best customers and offers free weekend rental if a customer rents a car for five consecutive days, including the customer base of automotive rental has a relatively low cost will not turn on. Instead, the owners facehigh fixed costs including insurance operating lease of real property, and maintenance. Consequently, the owners are car rental prices are sensitive only to recover operating costs and to meet its customers' needs adequately. Moreover, since the industry has grown slowly in recent years of economic stagnation due to the field led to a massive drop in business travel and leisure business, including industry leaders are more aggressivetry to reposition their business arena gradually reducing the dependency on air transport and regain their competitive position in your free time.
