Risk Management of Car Rental

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Assignment 1- Development of Business case
Introduction & over view of case
Since 2007, the rent a car industry has been booming since the financial crisis had hit the world. Peoples’ buying power drastically went down as they could not afford to pay the huge sum of money to car dealers. After 2007, banks refused to give loans to the general public as they were in no position to. In the Middle East owning a car has become more of a necessity than just a luxury as people cannot do their house hold jobs without it, and even small businesses cannot operate without a car. However, the expenses of owning a car is increasing day by day and handling maintenance of a car is difficult for people with busy work schedules, so customers are now diverting to rent a car companies and relying on them to handle all the extra car expenses in result for a good working car.

With fulfilling the needs of the lower market, rent a car companies are now targeting the high end market by providing them the most luxuries cars for themselves or for their VIP guests. More over the market has been consistently up lifted by the locals of the country as they are car fanatics by nature. Majority of the young UAE nationals are brought up in families who own high esteem cars and with such upbringing they develop a passion about cars and desire latest or unique models. Now with the rent a car industry expanding they can now provide different variety of cars at reasonable prices to the local customers with the option of renting cars only for a few months and can later on switch to newer models if they desire. Money is not an issue for the UAE nationals; so long the product they are purchasing is satisfactory.

Business of renting cars has been always very profitable. Many new international companies have already started catering this part of the world and with so many people migrating to UAE on contract basis, they are looking for competitive prices to rent the cars on yearly basis till their contract expires. Hertz has more than 40 different locations for renting the cars and last year Hertz and Dollar Thrifty announced Definitive Merger Agreement, under which Hertz would acquire Dollar Thrifty for $87.50 per share in cash in a transaction valued at a corporate enterprise value of approximately $2.3 billion. Budget Car & Van Rental, UAE, is owned by the highly respected UAE-based Liberty Investment Company (LIC), which is the holding company for a diversified group with extensive interests in the Automobile Trade and related businesses, Travel & Tourism, Transportation, Logistics, Real Estate & its services and Management &Consultancy. The ISO standards, combined with the service commitment of the entire rent a car industry, companies in this part of the world would ensure customers to receive great value through superior services across all areas of the company.

Objective
Al Jaber Establishment
Al Jaber group is among leading business tycoon who has lived in UAE for quite a long time and has been succeeding in almost all its sectors. Al Jaber, the owner of Al Jaber Group, was not from a wealthy family. Nonetheless, with his business initiative and risk seeking nature he managed to expand from a small company into a multibillion dollar establishment. Now he has passed on his company to his children, two sons and one daughter, who are expanding his establishment into different sectors. Mohammad Al Jaber, the son of the owner, has a great passion for the modified cars so he established his own business of modified and renting cars which he started under his father’s name. In this division he opened up three companies, Prestige cars, Prestige services and German Rent A Car. All the three companies deal with exotic modified cars which cater the upper niche market of UAE with their offices located across Abu Dhabi and Dubai. German Rent a Car

GERMAN RENT A CAR is a new pinnacle in the luxury limousine and car rental sector in...
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