Industry profit has been tightened by consumers' ability to compare prices through car rental aggregator websites.
Melbourne, Australia (PRWEB) March 05, 2015
Operators in the Car Rental industry in Australia have cruised along at a slow speed over the past five years as it has recovered following the global financial crisis. Largely positive consumer sentiment and business confidence have allowed for greater certainty in household and business income streams, which has led to more domestic holidays being taken and more corporate travel occurring. According to IBISWorld industry analyst David Whytcross, “With more travel occurring throughout Australia, demand for rental cars has been boosted.” Coupled with growing international travel to Australia, industry revenue is forecast to rise by a compound annual rate of 1.3% over the five years through 2014-15, to reach $1.21 billion. Growth of 0.6% is forecast for the current year.
The recovery over the past five years has been limited by a strong Australian dollar, which has discouraged some international travel to Australia. The composition of tourists coming to Australia has changed. “Tourists are increasingly coming from Asia rather than western countries, and this trend has proved less lucrative for the industry,” says Whytcross. On top of this, profit margins have been tightened by consumers' ability to compare prices through car rental aggregator websites. Consumers have become more adept at using the internet to book rental cars, causing increasing price competition within the industry. These websites have also provided greater opportunities for new entrants, as marketing expenditure becomes less vital in attracting customers. The industry exhibits a high level of market share concentration. Major companies include WTH Pty Limited, Hertz Investment (Holdings) Pty Limited, Europcar Holding Pty Ltd and National Roads and Motorists’ Association Limited.
Car sharing programs present a threat to the industry. While car sharing does not yet provide major competition to the Car Rental industry, it is expected to expand rapidly over the next five years. Domestic tourists are expected to enjoy the flexibility of car sharing arrangements, particularly with multiple inner-city pick-up points and renting by the hour. The falling Australian dollar is also expected to attract more international tourists, boosting demand for rental cars. However, competition within the industry due to aggregator websites and competition from car sharing are expected to constrain industry revenue over the next five years.
For more information, visit IBISWorld’s Car Rental industry in Australia report page.
Companies in the industry are involved in renting out cars. The industry includes car rental companies that also rent out trucks, vans and buses. The industry excludes commercial and fleet leasing.
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Products & Markets
Products & Services
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Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
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