U.S Car Rental Industry

Topics: Car rental, United States, Car rental companies Pages: 10 (2605 words) Published: August 27, 2013
Overview Report of Car Rental Industry in USA

Table of Contents

Executive Summary3
Introduction4
Current Overview of Industry4
Political, Economical, Social-Cultural, Technological, Legal and Environmental (PESTLE Analysis)5
Political5
Economical5
Social –Cultural5
Technological6
Legal6
Environmental6
Porters 5 Forces Model7
Threat of Substitutes7
Bargaining Power of Suppliers7
Competitive Rivalry7
Bargaining Power of Buyers7
New Entrants8
Conclusion8
Bibliography9-10
Appendices11-13

Executive Summary

This overview report will assess the structure of the United States Car Rental Industry. An in depth overview of the market in the United States will be reported; including an analysis of the macro and micro environment using Porter’s Five Forces and PESTLE Analysis. The report will also analyse current and future trends or challenges that are affecting the United States Car Rental Industry.

Introduction

Car rental in the 21st century forms an integral part of the global travel and transportation market worldwide. Following a three year slide in revenues and growth the car rental industry in parts is going through a recovery period. The scope within the car rental market industry consists of the leisure, business and insurance replacement and furthermore, looks upon the short term aspect of car rentals.

The main integral aspect of the downfall within the market was due to the impact upon the global financial crisis. This was deem the main challenge faced by the car rental industry as it opposed a negative impact on car rental sales as consumers started cutting down travel cost and looking for cheaper alternatives (Euromonitor International, 2011).

Current Overview of Industry

The car rental industry is a multi-billion dollar sector of the US economy. Alone the US segment of the car rental industry market makes on average $18.5 billion in revenues per year. Today, there is an expanding growth of approximately 1.9 million rental vehicles that service the US segment (Monestime, 2006).

There are three large major leading companies in the United States car rental market which have established high returns of revenue; Enterprising Holding, Hertz and Avis Budget Group.

In 2010, Enterprise Holding leads the market in value shares at 51.5%; Hertz currently in second with 17.5% and third Avis hold 15.4% (Euromonitor International, 2011). All three market share leaders recorded declining sales due to the financial crisis in 2009, but are steadily making grounds in their abilities to further increase revenues and market share.

Appendix 1 illustrates the amount of revenue earned by the leading companies in the US car rental market.
Appendix 2 Analysis of car rental market share in USA from 2006-2010.

Political, Economical, Social-Cultural, Technological, Legal and Environmental (PESTLE Analysis)

Political

United States has a Federal Government system. The current political status of the United States is stable though is still faced with specific challenges that consist of; health care, education, war in Iraq and Afghanistan. The Obama administration ever since being in government, have outlined the health care issue their main objective, though as the next election is approaching both the Obama administration and the Supreme Court have been torn apart between the health care law, as they find this current law unconstitutional. With the possibility of dropping the health care law there could be consequences with the Medicare Payment System (Register Citizen, 2012). Even if the health care law was to be overturned the government would still have the rights under previous laws to pay insurance plans, doctors, hospitals and other providers.

Economical

The United States are in a state of recovery ever since the financial crisis; therefore as of the ending of 2011 they had an economic growth of 1.8% (Trading Economics, 2012). In many...

Bibliography: Banks. S. 2010: “Current & Future Trends in Automotive Industry”, Oracle [Online] viewed 1st May, 2012 via http://www.oracle.com/us/corporate/profit/opinion/102910-banks-190918.html
Broughton
Jacobsen. L. A & Mather. M, 2010: “U.S Economic & Social Trends since 2000”, Population Bulletin, Vol.65, No.1 pp 13-14 [Online] Viewed 5th May, 2012 via http://www.prb.org/pdf10/65.1unitedstates.pdf
Jensen
Lekiu. H, 2011: “The Vast Car Rental Industry Worldwide-Half 3”, Article Dashboard [Online] Viewed 6th May, 2012 via http://www.articledashboard.com/Article/The-Vast-Car-Rental-Industry-Worldwide-Half-3/1288399
Meece
Monestime. R. 2006: “The Car Rental Industry”, Ezinarticles [Online] viewed 30th April, 2012 via http://ezinearticles.com/?The-Car-Rental-Industry&id=491218
Pachon
Trading Economics, 2012: “United States GDP growth rate” [Online] 1st May, 2012 via http://www.tradingeconomics.com/united-states/gdp-growth
United States Department of Labor, 2012: “Unemployment rate changes little (8.1%)”, U.S
Appendix 1
Figure 1- Car rental market revenue leaders (Source: Auto Rental News 2012)
Figure [ 2 ]- Car Rental Market Shares 2006-2010 (Source: Euromonitor International 2011)
Appendix 3
Figure 4-Hybrid Vehicle Market Share and Petrol Prices (Source: GoAuto, 2011)
Appendix 5
Figure 5- United States Quarterly Breakdown of GDP Growth Rate (Source: Trading Economics 2012)
Appendix 6
Figure 6- Ending 2011 to Beginning 2012 U.S Unemployment Rate (U.S. Bureau Labour Statistics, 2012)
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about Car Rental Industry Germany
  • Essay on Operations Strategy in the Rental Car Industry
  • Car Industry Essay
  • Essay about Lotus Car Rental
  • Lotus Rental Car Proposal Essay
  • Car Rental Industry & Elasticity Essay
  • lotus car rental Essay
  • Essay on car industry

Become a StudyMode Member

Sign Up - It's Free