Last month I noted the entrance of three major oil companies into the car rental field with the comment that I couldn't help but wonder if too many people weren't trying to cash in on a market that wasn't quite ready. I noted that I have always been a strong advocate of unlimited competition but equally against unwarranted expansion. I have since heard from several readers regarding my comments. Some felt I was being unfair to new companies and individuals entering the field. Others agreed with my position. Significantly, several car rental operators said they would like to get out of the business.

There is no doubt in my mind that the car rental industry will continue to grow and prosper. Best estimates indicate that there are now more than 120,000 cars used exclusively in the car rental field. This represents a gain of 1,000 per cent over the 12,000 cars service in 1947. Indeed, the industry has come a long way from the August day in 1916 when Joe Saunders rented his first car in Omaha
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The fantastic growth of the car rental business-and the success of established companies-has attracted many new individuals and companies to the field. Unfortunately, many are poor businessmen, some of whom would have failed in any business they entered. Unfortunately, some are not adequately financed. Unfortunately some do not have the benefit of a national organization to counsel them of the pitfalls to be avoided. Unfortunately some are located in poor locations.

I feel that the availability of rental cars may be growing at a much faster rate than the use of rental cars. While less than 4 per cent of the nations 99,000,000 licensed drivers have ever rented a car, how many are in a position to use a rented car? Stiffer competition and lower rates are bound to hasten the use of rented cars, but until a new level of use is reached, there may well be many expensive casualities.

I feel that the next two or three years will see a real shakeout in the industry. I think there will be many failures. One reason is that it is relatively simple to enter the field. One can start small and hope to grow. Banks and other lending institutions readily lend money on cars. There are literally hundreds of franchises open to prospective rental operators. On the surface, the car rental field looks attractive, easy and highly profitable. This is not the case.

Even the giants of the industry have had their problems. Hertz Corp. shook out its problems a few years ago and Avis Inc. and National Car are just beginning to see the light. I predict that other national companies in the field will suffer growing pains in the years ahead. And, all will not survive. I was told recently that one relatively new national company is already in trouble and that its franchised operators are unhappy with the parent company. Such problems are not unique to the car rental industry. The problems confronting the industry are the same problems faced by the auto industry nearly 40 years ago and by the electronics industry a decade ago.

To be successful, a car renter must have sufficient capital. He must know his business. And be willing to work at it full time. He must meet competition with initiative and in a forthright manner. He cannot stand still. Even the giants of the industry recognize this. Witness the formation by Hertz of its Valcar operation to cash in on the discount market.

National organizations working with franchised operators must be willing to assist their dealers with advertising, promotional campaigns and, most important first class counseling and service. The franchiser who merely signs up dealers merely to get volume won't be around very long.

Because of the nature of the business, the car rental field offers opportunity for both the small operator and the large corporation. But both must realize the pitfalls to be avoided-and that growth must be orderly. As more companies enter the field, competition will intensify and only the healthy will survive. This is the way it should be.