CORPORATE INTERNSHIP PROGRAMME

COMPANY : FINALRENTALS

REPORT SUBMISSION ON ADOPTION OF MARKET STRATEGIES

FOR WIDER EXPANSION OF CAR RENTAL BUSINESS.

PROJECT ALLOTTED BY : MR. AMMAR AKHTAR

SUBMITTED BY : HINA BAJAJ
(FORTUNE INSTITUTE OF INTERNATIONAL BUSINESS)
 INDEX :

1. OVERVIEW
2. MARKET SIZE
3. OPERATORS
4. IMPACT OF COVID-19 ON CAR RENTAL
BUSNESSES.
5. MARKET SEGMENTATION
6. MARKETING STRATEGY
OVERVIEW:
Car rental services operate in a network of pick-up/drop-off points and offer a range of vehicles. The
vehicles are owned by an organization or firm that rents them to users for short periods of time, based on
daily, monthly, or annual plans. Car rental has grown from a basic service provided by popular
organizations to a widely recognized component of the urban transport market. It is also swiftly
developing into a globalized industry that can provide many transportation, land use, environmental, and
social benefits.

MARKET SIZE :
The European car rental market is fragmented compared to its American counterpart. In the US, three
groups control some 95% of the market whereas in Europe 5 major operators hold an approximate 65%
market share, the remainder being in the hands of independent, mainly national and/ or regional
operators.

We see real potential for structural change in the European market, i.e. a consolidation. In a medium
term perspective, we see a scenario with 3-4 majors potentially controlling 75-80% of the overall market
as realistic.

The European market is approximately half the size of the US market and top five countries (France,
Germany, the United Kingdom, Spain and Italy) represent roughly 70% of the total market.

GLOBAL VEHICLE RENTAL MARKET

Revenue in USD billion, 2019-2025

$92.92 Billion to $214.04
Billion

2019 2020 2021 2022 2023 2024 2025

  The expected Global Revenue for Car Rental Industry is expected to reach $214.04 Billion
from $92.92 Billions in 2019.

Tourism is a major economic activity in the European Union, with wide-ranging impact on economic
growth, employment, and social development. It is a growing sector and key to the economy, as it
generates more than 5% of the GDP of the European Union.

However issues regarding driving licenses of other counties being valid, convenience of hiring a taxi
or chauffer driven vehicles and good availability of public transportation in major cities across the
region have been acting against Car Rental industry.

INTERNATIONAL TOURIST ARRIVALS, EUROPE, 2010-2018

710.0
673.3

486.4

2010 2017 2018

As per the UN World Tourism Organization , the international tourists' arrivals in Europe would be
around 218.37 billion by the end of 2020.

France was the most popular destination in Europe and saw more than 89 million international visitors
in 2018. France was followed by Spain with 82.7 million visitors and Italy with 62.1 million visitors.
Greece, Croatia , Belgium ,the Netherlands, and Turkey are some of the countries, which saw a
considerable influx of foreign arrivals.

European car rental companies cater majorly to tourists, looking to explore the destinations in their
own time; with online and walk-in booking services making car rental more simple, accessible, and
efficient. Furthermore, with relaxation in the issuing of visas to tourists from the important source
markets, such as the United States, Canada, Japan, and Australia, also propelled the tourism in the
country, in turn, driving the vehicle rental market.

Tourism is a growing sector in Spain, and is one of the key factors, driving the growth of the
economy. The country has 47 UNESCO World Heritage Sites, numerous beaches on the Atlantic &
Mediterranean, and numerous ongoing festivals across the year, which aids in gathering millions of
international tourists, along with domestic tourists.
  As per the UN World Tourism Organization, Spain registered 81.8 million international
tourists.
 This helped Spain to hold the second position as the most visited country in the EU region,
after France.

Spanish vehicle rental companies cater specifically to tourists, looking to explore Spain on their own,
with online booking services, making vehicle rental simpler, accessible, and efficient.

The market for car sharing in Germany has also shown a booming trend over the last two years, and is
further expected to continue growing during the forecast period. The sharing of operating and
maintenance costs reduce the burden, significantly, among the consumers in a vehicle rental system,
and is one of the primary reasons for the growth of the German market.

OPERATORS :
There are five operators with a truly European-wide presence, which we will refer to as the majors in
this document, these are
• Avis Budget
• Enterprise
• Europcar
• Hertz
• Sixt

Avis Budget is present worldwide in more than 175 countries. The corporation took a major strategic
decision with regards to its European presence when it acquired Avis Europe, which was a stand-alone,
independent company. Since acquiring Avis Europe, the company has shown and proven a real
commitment to its European operations. It has put real effort behind developing Budget as a stand-alone
brand in the value segment and it has made a couple of tuck-in acquisitions that adds real depth to its
operations.

Avis Budget Group Inc. is a leading provider of mobility solutions. The company is a leading car rental
supplier , primarily engaged in serving the premium, commercial ,and leisure segments.
 It serves in more than11,000 locations in180 countries around the world. It also owns the Zip car
brand of car rentals .Zip car is one of the leading car sharing networks and comprises more than
one million members.
  Avis Budget Group Inc. operates most of its car rental services from North America, Europe, and
Australasia, directly. The company also operates primarily through licenses in different parts of
the world.

 It also owns Payless, a car rental brand that operates in the high-value segment of the industry.

 The company is dedicated to being the best-in-class, customer-led, service-driven organization,

driven by increased customer loyalty and profitable growth.

IMPACT OF COVID-19 ON CAR RENTAL INDUSTRY IN EUROPE :

 Restricted movement of residents and a city wide lockdown has shut 10,000+ construction sites
as well as halting commercial activity which resulted in lower incoming air traffic impacting
pick-ups as over 34% of all rental cars are picked up from airports. As most events are planned
on the onset of spring of spring, cancellation of large industry, art and college events have further
impacted this drop to be the highest across Europe. Specifically banning International Flights
completely crashed car rental prices as compared to 2019 for March.

 Cancellation of major industry and corporate conferences have led to a decline in demand for car
rentals.

 People after covid-19 will still be reluctant to go out and there is a possibility of arising trust
issues regarding hygiene and infection which can stop them from renting cars.

MARKET SEGMENTATION :

There are many ways to enter European markets with the help of online booking.The market studied
has been actively expanding over the past few years and many companies are now preferring to
automate their bookings, client grievances etc. by taking them online.

 This results in improving communication with customers to mitigate negative trends and to
increase profits .Also, with the market studied expanding both in terms of number of companies
as well as their geographic presence, players are again inclined toward taking their business
online to increase their reach among customers.

 Some small and local companies with a modest vehicle fleet and narrow-profile companies that
are specialized in the rental of premium vehicles, motorhomes, pick-up trucks etc. are
approaching online aggregators to register themselves.

 These online aggregators have a software platform through which they take and allot bookings
based on the availability of vehicles with the aforementioned small and narrow-profile
 companies. This helps both the companies sustaining the market and also works in favor of the
online booking mode.

 Internet penetration and use of smart phones by almost everyone has eased out the process of
online booking .Customers have the convenience to pre-book their vehicles even before arriving
at their destination. This helps hem save time and money by not visiting shops in person and get
some discounts, coupons and referral bonuses.

PASSENGER CARS :

 Another strategy which could be used here is to supply cars in one country of Europe to another.
There has always been the demand for cross country vehicles facilities which Finalrentals could
provide.

 Customers would have the flexibility to choose between a wide range of models(hatchback,
sedan, and sports utility vehicles). Currently, service providers are even focusing on offering
premium and luxury cars as people’s spending on them have also seen an increase.

 Post the COVID-19 pandemic period, due to prolonged implication of practices, like social
distancing and privacy ,more people traveling abroad are expected to opt for car rentals at their
destination as against making use of public transportations. This would help them enjoy their
vacation without any reservations, and shell out more on car rental services which would help the
market grow.

 Moreover, companies are now working with individuals who own private cars to get their
vehicles on-board their booking portfolio to increase fleet size and availability. This is one other
factor that is expected to help the passenger cars segment in the Europe vehicle rental market
grow.

COMMERCIAL CARS :

 Short-term leasing is likely to continue to grow during the forecast period, as it aids the
European businesses meeting the peaks and troughs of seasonal demand by providing suitable
trucks for the job at a short notice, without any penalties or commitments.

 European cars are majorly rented for a 24-hour period, usually with a 59-minute grace period.
However, vehicles are most economical when rented for a week, or for a duration of more than
five days, with unlimited mileage.

Examples could include :

 Finalrentals can have their partnerships with famous groceries stores of Europe such as
E.Lecrec, EdekeGroup, Tesco PLC which provide home delivery 24*7. The departmental
stores can focus on hiring vehicles on monthly basis to supply groceries. The opportunity to
work in different segments of Europe can be attained by targeting these stores as they have
their chains across Europe in England, Germany, Italy etc.

 Alliances with ZOMATO : The scope of Zomato in Europen Markets is still limited but with
active deliverables by providing trucks for food delivery. Finalrentals could have possibilities
in operating in Europe sectors such as United Kingdom.

 Contracts with Armed Forces in Europe : Defence supplies has always been a continuous
process. Equipments, groceries and other defence materials has to be supplied to individual
units. This can be done by approaching Military units by supplying cars according to their
needs which could be beneficial in long term.

 From “Cheap and Best” to “Fare and Safe” : Post COVID19, most of the traveler mindset will be
full of doubts about cleanliness and sanitization policies will be of prime concern. Car rentals
messaging around their cleaning and safety procedures will allow them to book at better rates
even if cheaper competitors are available.

 Free Contactless Home Delivery of Car rental : With restrictions and limitations on public
transport as well as Cab services, Finalrentals could offer free home delivery of car rental which
is likely to get popular. It can also be a landmark move to uplift car rentals in new digital world.

 Cancellations Vs Discount Credits/Rebooking Options on Future Pickups : With lockdowns and

social distancing across major markets, cancellations have increased by 50% to 80% compared to
 last year in all regions, pricing managers must launch credit/easy cancellations/rebooking
schemes on high demand future dates to improve revenue forecast in coming months.

 An emerging trend would be to provide more environment friendly vehicles. ( both hybrid and
electric.)

 Growing use of mobile and web based technology to document vehicles at check in and
checkout.

 Emergence of smartphone applications offering features like voice activated reservations,

vehicle health tracking and wireless hotspots.

 Increasing the trend for social media operations in order to raise customer experience as well
as the brand image.

TOP MARKETING STRATEGY :

1.SOCIAL MEDIA MARKETING :

Posting useful content on social media on a regular basis. This would include Finarentals service updates
and other information that is relevant to the niche. The information should be useful to our followers.
This especially includes events like new vehicles being added to our fleet and special discount offers.

2. VIDEO MARKETING :
As a car rental business we can create videos of our business place, vehicles, employees, a normal day at
work, or even share videos from other sources which matter to our target audience. Video sharing
websites like YouTube have made it easier than ever to create and share videos. And social media sites
like Facebook, Twitter, and Instagram have also become quite video-friendly. It should always be kept
in mind that by targeting European Markets we should also create content in their regional language
with the same essence and theme.

3. SEO :
Our potential customers are certainly going to search for our services in Google, and other search
engines when they need a car rental service. And if we are not going to rank for the relevant keywords
they are going to use, we are missing out big on search traffic and leads. So it is important to make the
most of SEO as a car rental service. SEO helps our website to rank higher in search engine results and
thus drive more targeted traffic. SEO is a cost-effective strategy and to get high quality traffic

4. ADWORDS OR BING ADS :

There are many pay-per-click (PPC) ad programs like Bing Ads and AdWords that require us to pay
only when our ads get clicked. It is an effective way to drive high-quality leads for car rental businesses.
It is highly likely that only those who are interested in our service are likely to click our ads.
PPC also provides access to valuable statistics that does much more than helping keep track of the
traffic. It helps generate highly targeted visitors instead of just random visits. It is important to choose
the right advertising program based on our goals and budget.