Car Rental Industry Germany

Topics: Car rental, Carsharing, Car rental companies Pages: 19 (6463 words) Published: November 2, 2012
German Car Rental Industry|
21510 - Global Context of Management (Due: 07 May 2012)|
Melissa Townsend 11245216|


Executive Summary| 2|
Introduction| 3|
Industry Landscape| 3-4|
Future Outlook| 4|
PESTEL Analysis| 4|
Porter’s 5 Forces Analysis| 5|
References| 6-7|
Bibliography| 8|
Appendices| 9-24|

Executive Summary

This report provides an overview of the German car rental market from a national and global perspective. It also addresses current challenges facing the industry, and what measures are being implemented for its survival in a harsh operating environment, post GFC.

By analysing legal and political, technological and economic, not excluding social and environmental variables, the reader will gain insight into the industry’s intricate relationships and top ranking performance measures.

A further analysis using Porter’s 5 Forces, details the competitive landscape, increasing the buyers and suppliers markets with a view into examining economic opportunities versus risk management and liabilities.

This report also anticipates future prospects of the industry whilst forecasting steady continuous growth, and a sound recovery system, following GFC’s recent world-wide impact.

The major findings in this report include:
* The GFC aftermath, its effects on the industry’s buyers and consumers and their forced adaption to purchase than short-team leasing * The threat of low quality substitutes determining consumers to shift towards severe cost cutting and consciousness environment concerns. * High internet usage and availability encouraging increased consumer confidence in Buying Power * The EU and German Governments inevitable push towards electric vehicle fleets, in dominating the industry as a whole. * Other functioning business partners, especially in tourism and trade and their vital role in assisting major support networks.


The car rental industry mainly consists of passenger vehicles through commercial and leisure realms based on a short-term basis (less than one year). For the purpose of this analysis, long term car rental (over one year) and commercial vehicle rental (such as trucks and vans) are excluded. The car rental market in Germany averages of USD $11,740 million (refer Appendix 3.4) and its capital city Berlin ranks at 14 globally in terms of profits. As a result of the Global Financial Crisis (GFC) in 2009, the industry’s overall growth was stagnated, however a significant increase in global travel from 2010 saw the industry regain steady momentum, in time for the future challenges that climate change and its resulting policies and laws will bring (refer to Appendix 5). -------------------------------------------------

Industry Landscape
In direct correlation between travel/tourism and car rental industries, the latter was often referred as a feeder industry – having a strong dependency on the success of travel and tourism. Albeit, the car rental industry is also deemed as a complement to the travel/tourism industry, playing a vital role in increasing the ease of transportation for tourists (Erdogan and Bavik, 2008). Germany is a popular tourism destination due to its positive image and value for money, with more than one third of Germans preferring to spend their holidays in their own country. As a result of this, the German car rental industry is hovering around 4% in total global earnings and ranks at 1 for market potential in Europe. (Parker 2010) (Refer to Appendix 4.2)

Post GFC, the car rental industry has seen positive movements since 2011, with Agnew (2011) reporting that car-rental transaction days have increased by 7% whereas the Air Transport...
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