Guide to Vehicle Hire Organizations in Costa Rica

Industry Overview

The car hire market is really a multi-billion buck field of the US economy. The US phase of a averages about $18.5 thousand in revenue a year. Today, you can find around 1.9 million hire vehicles that service the US phase of the market. In addition, there are lots of hire agencies besides a leaders that subdivide the full total revenue, specifically Buck Thrifty, Budget and Vanguard. Unlike different mature service industries, the hire car market is very consolidated which naturally places possible new comers at a cost-disadvantage since they experience high feedback prices with decreased chance of economies of scale. Moreover, the majority of the profit is produced by way of a few firms including Enterprise, Hertz and Avis. For the fiscal year of 2004, Enterprise produced $7.4 thousand altogether revenue. Hertz came in next place with about $5.2 thousand and Avis with $2.97 in revenue.

Level of Integration

The hire car market encounters a very different environment than it did five years ago. In accordance with Organization Vacation News, vehicles are increasingly being hired until they've accumulated 20,000 to 30,000 miles until they are banished to the applied car market whereas the turn-around distance was 12,000 to 15,000 miles five years ago. Due to gradual market development and narrow profit margin, there's number certain danger to backward integration within the industry. In reality, among a people just Hertz is vertically incorporated through Ford.

Range of Competition

There are numerous factors that shape the competitive landscape of the vehicle hire industry. Competition comes from two principal sources throughout the chain. On the vacation consumer's end of the selection, competition is brutal not just because the marketplace is unhealthy and well guarded by market chief Enterprise, but competitors perform at a cost drawback along side smaller market gives since Enterprise has recognized a system of sellers around 90 percent the discretion segment. On the corporate phase, on the other hand, competition is quite strong at the airports since that phase is under limited supervision by Hertz. Since a underwent a huge financial problem lately, it has replaced the degree of competition within the majority of the companies that survived. Competitively speaking, the hire car market is really a war-zone as most hire agencies including Enterprise, Hertz and Avis one of the key people participate in a battle of the fittest.


Within the last five years, most firms have now been functioning towards enhancing their fleet dimensions and increasing the degree of profitability. Enterprise currently the organization with the greatest fleet in the US has added 75,000 vehicles to its fleet since 2002 that assist improve its number of services to 170 at the airports. Hertz, on the other hand, has added 25,000 vehicles and broadened its international presence in 150 areas as opposed to 140 in 2002. In addition, Avis has improved its fleet from 210,000 in 2002 to 220,000 despite recent financial adversities. Through the years following a financial downturn, although most organizations all เช่ารถเชียงใหม่ through a were striving, Enterprise among a leaders had been rising steadily. For instance, annual income reached $6.3 in 2001, $6.5 in 2002, $6.9 in 2003 and $7.4 thousand in 2004 which translated into a development charge of 7.2 percent per year for days gone by four years. Since 2002, a has begun to regain its ground in the field as over all income became from $17.9 thousand to $18.2 thousand in 2003. In accordance with market analysts, the better days of the hire car market have however to come. On the course of another several years, a is expected to see accelerated development valued at $20.89 thousand each year following 2008 "which equates to a CAGR of 2.7 % [increase] in the 2003-2008 period.”


Within the last couple of years the hire car market has created a great deal of progress to help it circulation processes. Today, you can find around 19,000 hire locations containing about 1.9 million hire cars in the US. Because of the significantly abundant number of car hire locations in the US, strategic and tactical approaches are taken under consideration in order to guarantee appropriate circulation throughout the industry. Circulation takes place within two interrelated segments. On the corporate market, the cars are spread to airports and resort surroundings. On the discretion phase, on the other hand, cars are spread to agency held services which are easily based within most key streets and urban areas.

Before, managers of hire car organizations applied to depend on gut-feelings or user-friendly guesses to produce decisions about just how many cars to possess in a certain fleet or the use stage and efficiency criteria of keeping certain cars in one single fleet. With that methodology, it was extremely tough to keep up a level of stability that would meet consumer need and the specified level of profitability. The circulation method is rather easy throughout the industry. In the first place, managers must determine the number of cars that really must be on stock on a daily basis. Just because a really apparent issue arises when a lot of or inadequate cars are available, most car hire organizations including Hertz, Enterprise and Avis, work with a "pool” which is a band of separate hire services that share a fleet of vehicles. Ostensibly, with the pools in position, hire locations perform more effectively since they minimize the risk of reduced stock if not eliminate hire car shortages.

Industry Segmentation

Most organizations throughout the string produce a profit centered of the type of cars which are rented. The hire cars are categorized in to economy, compact, intermediate, advanced and luxury. On the list of five classes, the economy field produces the most profit. For example, the economy phase alone is responsible for 37.7 percent of the full total market revenue in 2004. In addition, the compact phase accounted for 32.3 percent of over all revenue. The remaining different classes addresses the remaining 30 percent for the US segment.