US car rental market led by Enterprise Rent-A-Car, Avis and Hertz

The US car rental market is expected to see revenue fall from its peak of $31 billion in 2007 to $30.5 billion in 2012, but the industry is forecast to recover and rise at a compound annual growth rate (CAGR) of 6% through to 2015.

Cars are rented on a daily, weekend, weekly or monthly basis. Rental charges can include limited or unlimited mileage rates, or a time rate plus a mileage charge, while car-sharing charges constitute an annual membership fee plus an hourly rental rate. Industry rates vary by rental location and are affected by the local market, competitive factors and store fixed costs. Typically, all rental agreements specify that the customer pays for gas used during the rental.

The global recession put the brakes on the industry, but a revival in demand for air travel will stimulate growth again. Rising personal incomes and more generous corporate travel budgets will underpin growth from this market; however, rising fuel prices and the corresponding increase in ticket prices threaten that forecast.

The global car rental industry is undergoing a radical transformation. Four years ago, almost all of the major US car rental companies were owned by car manufacturers. Today only Hertz (80% owned by Ford) remains in auto manufacturer control: Enterprise Rent-A-Car, National Car Rental and Alamo Rent A Car, are owned by the Taylor family of St. Louis; Henry Silverman - whose Cendant - owns Avis; and Sandy Miller, the former franchisee, owns Budget, Ryder, and a variety of other transportation-related companies. These, along with a few others, now control over 90% of the market.

The largest companies, including major players Enterprise Rent-A-Car and Avis Budget Group, enjoy large marketing budgets and market power that grant national brand recognition, relationships with airlines and hotels and other advantages smaller companies cannot match.

The US car rental market is expected to witness new rental services being introduced due to technology usage, which will drive the market in the near future. For instance, more electric cars will be available for rental. Enterprise Rent A Car has expanded its electric fleet to 11 California cities and is operating as the state's largest network of ''green'' rentals. Similarly, Hertz has introduced 24/7 ExpressRent kiosks at airports. Furthermore, Hertz gold members can sign up for ''eReturn,'' which offers electronic receipts and faster vehicle returns.

For more information on the US car rental market, see the latest research: US Car Rental Market

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