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3:34 AM   [25 May 2019 | Saturday]

Information to Vehicle Rental Businesses in Costa Rica

 Market Overview

The car rental industry is just a multi-billion dollar industry of the US economy. The US phase of the industry averages about $18.5 million in revenue a year. Today, there are around 1.9 million rental vehicles that support the US phase of the market. Furthermore, there are lots of rental agencies besides the industry leaders that subdivide the full total revenue, particularly Dollar Thrifty, Budget and Vanguard. Unlike different mature support industries, the rental vehicle industry is highly consolidated which normally puts possible new comers at a cost-disadvantage simply because they face large feedback prices with decreased possibility of economies of scale. Moreover, most of the income is generated by a few firms including Enterprise, Hertz and Avis. For the fiscal year of 2004, Enterprise generated $7.4 million altogether revenue. Hertz came in next place with about $5.2 million and Avis with $2.97 in revenue.

Amount of Integration

The rental vehicle industry faces a totally different setting than it did five years ago. Based on Organization Vacation News, vehicles are increasingly being leased until they've gathered 20,000 to 30,000 miles until they're directed to the applied vehicle industry while the turn-around mileage was 12,000 to 15,000 miles five years ago. As a result of gradual industry development and thin income margin, there's number forthcoming risk to backward integration within the industry. In reality, among the industry people just Hertz is vertically incorporated through Ford.

Range of Opposition

There are many factors that shape the aggressive landscape of the automobile rental industry. Opposition originates from two principal options through the entire chain. On the holiday consumer's end of the variety, opposition is tough not just because the market is unhealthy and well guarded by industry head Enterprise, but rivals perform at a cost disadvantage alongside smaller industry gives since Enterprise has recognized a network of merchants around 90 percent the leisure segment. On the corporate phase, on another give, opposition is quite strong at the airports since that phase is under small direction by Hertz. Since the industry underwent a massive financial downfall in recent years, it has replaced the scale of opposition within most of the firms that survived. Competitively talking, the rental vehicle industry is just a war-zone since many rental agencies including Enterprise, Hertz and Avis among the important people participate in a struggle of the fittest.


Within the last five years, most firms have already been functioning towards enhancing their fleet dimensions and raising the amount of profitability. Enterprise presently the company with the greatest fleet in the US has included 75,000 vehicles to its fleet since 2002 that assist improve its amount of services to 170 at the airports. Hertz, on another give, has included 25,000 vehicles and broadened its global existence in 150 areas instead of 140 in 2002. Furthermore, Avis has increased its fleet from 210,000 in 2002 to 220,000 despite new financial adversities. Through the years following the financial downturn, even though most companies all through the industry were striving, Enterprise among the industry leaders have been growing steadily. For example, annual sales achieved $6.3 in 2001, $6.5 in 2002, $6.9 in 2003 and $7.4 million in 2004 which translated right into a development rate of 7.2 percent annually for the past four years. Since 2002, the industry has begun to restore its footing in the industry as over all sales grew from $17.9 million to $18.2 million in 2003. Based on industry analysts, the better days of the rental vehicle industry have yet to come. Over the length of the following several years, the industry is estimated to have accelerated development appreciated at $20.89 million each year subsequent 2008 "which equates to a CAGR of 2.7 % [increase] in the 2003-2008 period.”


Within the last few years the rental vehicle industry has made a lot of development to aid it circulation processes. Today, there are around 19,000 rental places producing about 1.9 million rental cars in the US. Due to the increasingly considerable amount of vehicle rental places in the US, proper and tactical approaches are taken into consideration to be able to ensure proper circulation through the entire industry. Circulation takes place within two interrelated segments. On the corporate industry, the cars are distributed to airports and lodge surroundings. On the leisure phase, on another give, cars are distributed to organization possessed services that are conveniently located within most important roads and urban areas.

Previously, managers of rental vehicle companies applied to count on gut-feelings or intuitive guesses to create conclusions about just how many cars to possess in a particular fleet or the utilization level and efficiency criteria of keeping particular cars in one single fleet. With that strategy, it had been very hard to keep a degree of รถเช่าเชียงใหม่ balance that would meet client need and the required amount of profitability. The circulation method is rather simple through the entire industry. To begin with, managers should determine the amount of cars that must be on catalog on an everyday basis. Because a very apparent problem arises when way too many or insufficient cars are available, most vehicle rental companies including Hertz, Enterprise and Avis, use a "pool” which is a group of independent rental services that share a fleet of vehicles. Essentially, with the pools in position, rental places perform more efficiently simply because they reduce the chance of minimal catalog if not remove rental vehicle shortages.

Market Segmentation

Many companies through the entire cycle make a profit based of the kind of cars that are rented. The rental cars are categorized in to economy, small, advanced, premium and luxury. On the list of five groups, the economy industry yields the absolute most profit. For instance, the economy phase on it's own is in charge of 37.7 percent of the full total industry revenue in 2004. Furthermore, the small phase accounted for 32.3 percent of over all revenue. The remaining portion of the different groups addresses the rest of the 30 percent for the US segment.

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