Car Hire industry responding to changing demands
Surveys conducted by car hire companies in Europe have revealed some changing consumer demands in the car hire market.
According to the surveys, some of the changes relating to car hire industry include:
- Changing Demand for Car Models - Rising Increase in bookings for cars that consume less fuel
- Fuel Efficiency driving car hire demand - Changing to The ‘mini’ and ‘economic’ variety of cars together made up for over 50% of the company’s bookings in 2008 from car hire companies
- Fuel Cost - Travelers are looking at fuel savings as top priority as opposed to comfort
- Car Insurance - Car insurance continues to be a great concern and cost concern when booking with car hire companies, according to a UK survey, more than 45% of travelers have registered some kind of insurance from car hire companies
- Comfort compromised - The weak financial scenario of 2008 has caused changed to many consumer demands, with budget on car hire now slashed
- Shorter Travel Distance – Car hire companies have also experienced rising demand for shorter durations and shorter distances from travelers
- Growth in combined booking services – surveys also shown that growth in combined bookings with car hire such as hotels and airport parking
- Airport Booking remain popular for Car Hire – airports remain as the main area for car hire bookings and enquiries
- Comparison Car Hire Sites – Increasing traffic for car hire comparison websites as the primary source for car hire related information
- Child Car Seats now adding to unexpected cost on car hires – a surprising charge for many travelers, but customers can save this car hire charge by using car hire comparison websites
- Travelers bring their own car seats instead of hiring one – increasing number of travelers now bring their car seats when hiring a car, this can save a lot of cost
- Compulsory car seats - Child and baby car seats are an absolute requirement in most countries, but some overseas travelers are unaware of this regulation, and therefore surprised when told by the car hire company. Again, this can be checked using car hire or travel websites
Similar Changes on the car hire industry in Australia?
Some of these industry changes reported overseas are also relevant in the Australian car hire market. Due to the falling AUD, many families have decided to take domestic holidays instead of international holidays, and this could be positive for the car hire industry for the coming Christmas.
Demand for luxury car or more prestigious models have declined in the local car hire industry, with more economic, fuel efficient cars more in demand, due to budget constraints. The average holiday stay is expected to be reduced in the coming Christmas holiday seas, and may affect the car hire industry.
Car Hire industry is a growing business
Despite of the challenges faced by car hire companies during the current global economic downturn, it is still a massive global industry and growth for car hire industry is expected to grow much further, especially in the emerging markets.
In November, Japan’s Mitsubishi group and Turkish car hire company Intercity are to invest $3 billion over 4 years in Turkey’s car hire market, a major growing market in the region. In the agreement, Mitsubishi is set to take 45% in this car hire joint venture.
Intercity Chief Financial Officer Mete Onol told Reuters Mitsubishi will take a 45 percent stake in Intercity. He declined to give a value for the stake.
New Opportunities for Car Hire companies
Another growing opportunity for car hire companies is “car-club” model. This is already a popular model in European market. This is actually an opportunity emerged for car hire companies from economic downturn.
Car-sharing clubs is a solution for consumers who do not wish to purchase a car, and choose to hire cars from parking bays in the neighbourhoods, unlike traditional car hire business model, rent can last for just few hours and is very flexible.
Streetcar and City Car Club, the UK’s two biggest clubs, have a combined 51,000 members and the industry is expected to grow 11-fold in the next four years, and Hertz, one the world’s largest car hire companies is also launching the model in UK and Europe.