Since the car fleet industry began to blossom immediately alter World War II, the industry's over-all growth rate has remained a pretty steady and profitable, 10 to 15 per cent.
In the last few years, however, the daily rental and individual leasing segments of that market have experienced a 15 to 20 per cent growth rate. And this increase shows no signs of slackening.
It is the very firm opinion of industry leaders that the over-all growth rate of the car fleet market will continue to show a steady 15 per cent rise. But industry leaders are just as quick to agree that the daily rental and individual leasing business "is where it all is happening."
"The daily rental field will go as far and as fast as the companies that are in the field want to grow," was the opinion of a top executive of one of the daily rental field's Big Three.
"There is no telling how high individual leasing will grow." the president of one of the country's biggest leasing companies told AF.
A good example of this growth can be found on Page 24 of this month's issue. Chevway's growth in a large measure reflects the potential that the local or individual market offers to leasing and rental companies.
The Chevway story, however, also points out that this segment of the industry is not one for amateurs, for fly-by-night operators in search of a fast buck. Such an operation as Chevway is a full-time business that demands full-time devotion. Such an operation must be adequately financed and amply staffed with qualified personnel.
As mentioned in the story, Chevway is embarking on a national ad campaign that not only will attempt to promote the dealers within the Chevway organization, but also will attempt to explain the concept of leasing to the general public. To my way of thinking, this is a step that must be taken by those involved in individual leasing before that segment of the over-all market can begin to experience its true growth potential. To think otherwise is to me a great mistake.
And what about the daily rental field?
It is an industry that faces many problems, yet one that offers unlimited potential for expansion. According to a top daily rental executive, 80 to 85 per cent of all daily rental business is conducted from airport locations. Yet this very fact is creating major problems for the daily rental industry.
The day of the jumbo jet will not be a day of utopia for daily rental companies. Instead, it will be a day ripe with problems and frustrations. Today's airports are all experiencing growing pains. Airport runways are being lengthened, control towers are being built, parking facilities are being added, new passenger areas are being built and old ones are being enlarged. Where does this leave the daily rental companies who previously had operated parking and maintenance areas at airports? In most cases, it leaves them holding the bag.
In Chicago, Hertz, Avis, and National are losing their airport parking areas. The story is the same in New York, Detroit, Miami, and Los Angeles. This means that in the future passengers renting ears will place an order at a rental counter and then wait until a car is delivered from a staging area.
Today, a line of passengers waiting for rental ears may contain 10 to 25 persons. When the jumbo jets arrive, that number may double, even triple. How will this congestion be handled? How will this How of business be expedited? Many believe one answer would be the daily rental companies operating in the airport location. This, of course, opens up numerous financial vistas for expansion of the daily rental market, especially by motels and hotels.
It would appear to me that motels and hotels would have a very sound and a very profitable selling point if they could offer to air travelers not only a room reservation but also a daily rental ear. Passengers would not have to wait in line at airport rental counters but would be taken to a motel or hotel by a limousine or bus. There, they would find their car waiting.
It is not my intention to imply that the clay of the airport daily rental is coming to an end. On the contrary, their business should continue to flourish. There simply will be so much more airport rental business that off-airport locations are bound to benefit. It is a situation that the Big Three are well aware of and a situation that many corporations and businesses outside the daily rental field are looking into.
In the April issue, AF will feature a story on Budget Rent-A-Car, a system based entirely on discount rentals from off-airport locations. We think the story bears special interest because of the situation in the airport daily rental market.
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