Car Rental Industry in the UK

The car rental industry is a multi-billion sector of the UK industry. In the industry made had averages about €2.6billion in revenue in 2008. In 2008 there were approximately over 11 million individual rental contracts. In additional, there are many rental companies besides the industry leaders. The car rental industry is high consolidated which mean that new entries have cost advantage as they have high input costs with reduce possibility of economies of scale. Most of the profit is generated by a few firms including Enterprise, Hertz and Avis.

There are many factors which shape the competitive landscape of the industry. Competition come from two main sources; on consumer segment competition is fierce as the market is saturated and industry leaders such as Enterprise use its economical of scale to create competitive advantage over competitors and there is smaller market share for competitor operating at cost disadvantage due industry leaders have more than 50% of the market. On the corporate segment, competition is strong at airports.

There has been a greater progress by the rental car industry to facilitate its distribution processes. In 2008 there were thousands of rental locations for about 212 378 cars in the UK. Distribution takes place within the two segments, on the corporate segment the cars are distributed to airports and hotels whereas leisure segment cars are distributed to the companies stores which are conveniently located within most major roads.

Over the years the profitability of the car rental industry has been falling.

According to Ezine articles( 2007) broadening fleet sizes and increasing profitability has been focus of most companies within the car rental industry. As in the industry there is ...

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...and consumers.

BVRLA’s members accounts for nearly half of all new vehicles sold in the UK and operate 2.5 million of cars, vans and trucks.

BVRLA state that its members spend £16 billion each year on vehicles and a further £4 billion on support services.

“Rental companies provide cars and vans on short term hire, for as little as an hour or as much as a month. Offering a flexible, fixed-cost and 'pay-as-you-go' approach to motoring, it is very popular with holidaymakers, business travellers and non-car owners who have an occasional use for road transport”, BVRLA.

The car rental market is very competitive with dozens of companies competing with each other for customers. From looking at the industry, it would be expensive for a small

Works Cited

http://ezinearticles.com/?The-Car-Rental-Industry&id=491218

http://www.bvrla.co.uk/About_the_BVRLA/Homepage.aspx