Automobile Rental & Leasing

Automobile Rental & Leasing

Brief Excerpt from Industry Overview Chapter:

Companies in this industry rent and lease passenger cars, trucks, and trailers. Major companies include Avis Budget Group, Enterprise Holdings, Hertz Global Holdings, Ryder, and U-Haul International (all based in the US), along with China Auto Rental and Cheeyo Car Rental (China); Europcar (France), and Sixt (Germany).

The auto rental and leasing industry in the US includes about 5,000 companies with combined annual revenue of about $40 billion and is expected to grow at a moderate rate in the next two years. Key growth drivers include energy prices, interest rates, and consumer spending levels.

Many leading US-based car rental companies also have international operations, primarily at international airports and usually through local franchisees.

COMPETITIVE LANDSCAPE

The industry depends highly on the general state of the US economy because most customers are business or vacation/leisure travelers, whose numbers can rapidly fall during an economic slowdown. Big companies have economies of scale in acquiring vehicles and customers. Small companies can compete effectively by providing better service, alternative products, or lower prices. The industry is highly concentrated: the 50 largest companies generate more than 80 percent of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major services include the rental and leasing of passenger cars, which accounts for about 60 percent of industry revenue, and the rental and leasing of trucks and trailers, which accounts for about 30 percent.

Operations are similar for car, truck, or specialty vehicle rental operations. A typical car rental operation has to acquire,...