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7 Takeaways from the 2013 Car Rental Show

As I settle back at my desk, here are a few thoughts on corporate culture, ACRA, the global community, franchising, independents and a “sane” car rental market.

April 18, 2013

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It’s hard to immediately process the whirlwind of activity that comprises the annual Car Rental Show (CRS). If you’re like me, CRS is ground zero for gaining market intelligence, establishing and building relationships, celebrating success and analyzing the challenges ahead. As I settle back at my desk, here are a few themes running through my head:

Corporate culture is everything: In listening to Bud Denker’s opening keynote, I wondered how many companies would have the audacity to enforce a nightly clean desk policy, insist on uniform, color-branded toolboxes in every dealership service bay or conduct nine interviews – including background interviews – as a condition of employment. Penske’s 40,000 associates are held to that standard. Ziad Khoury’s presentation furthered the importance of a strong corporate culture, injected with inspiration.
“Culture is not the most important thing; it’s the only thing in his business,” he said. “If you create the right environment, it becomes much easier to bring in the right people and retain them.”

Franchising is good business: Sixt had a big, good-looking booth on the show floor with two tables to get down to business with potential franchisees. The company just announced its first U.S. franchise in Tampa, along with an agreement in Las Vegas. Canada is now open. Enterprise is moving fast on franchising overseas. The Dollar Thrifty licensees were upbeat about their new corporate parent. One mentioned the potential for incorporating a Hertz Local Edition into his operation. Avis Budget Group held a meeting in conjunction with the show for 50 of its licensees. And of course, a powerhouse named Penske is now in the franchise fold with Hertz.

The world is our community: This year, we changed the show’s tagline to “The Global Marketplace for the Car Rental Industry.” This certainly reflects the ever-growing international attendance at the show. This year some 30 countries were represented, and we hosted the China Road Transportation Association, in addition to a contingent of 16 Korean car rental operators. By nature, not all exhibitors can do business outside the U.S., but those that do had signs to identify them. CRS is the only event specific to the auto rental industry that caters to a worldwide audience. The world truly feels smaller.  

Relationships matter: Ray Wagner of Enterprise Holdings wove this thought through his speech upon accepting the Russell Bruno Award. Wagner, who has been friends with Congressman Sam Graves for 25 years, stressed the need for car rental companies to establish similar relationships with their local politicians. I process this in relation to the show – those face-to-face meetings serve to facilitate business, strengthen phone and email relationships and solve problems quicker. I’d hazard to guess that each CRS attendee made at minimum 15 new contacts in two-and-a-half days.

Independents are thriving: Of course, only owners of successful businesses make it to the show. But in looking at this year’s registrations, there were more independent car rental companies compared to last year. In an anecdotal survey, I found that independents are cautiously adding fleet and benefitting from the rise in discount leisure travel. A softening used car market is a concern, but less so for most independents, especially the ones that age vehicles longer and fleet up on used units.

ACRA is on a roll: Last year, Sharon Faulkner, executive director of ACRA, was excited to announce at the show that all of the major car rental companies had joined the association. This year, the scramble was to promote the fact that five auto manufacturers have joined. Faulkner and the ACRA board have done a great job in marketing the association, but results are really what drive memberships. This year, ACRA successfully lobbied in Arizona to change car rental from primary to secondary liability, worked with Congress to draft sensible recall legislation, thwarted Graves Amendment challenges and helped to reduce or eliminate discriminatory tax issues in multiple jurisdictions.

The car rental market is “sane”: I did not use the word “normal,” because it’s never normal. But here are a few thoughts pulled from the closing keynote presentation and a presentation to exhibitors from John Healy of Northcoast Research. The softening used car market is a challenge, because new car prices aren’t expected to come down. But this has been baked into the forecasts for some time, and will keep the threat of over-fleeting in check. High new car prices are in part based on the fact that, post-Recession, the manufacturers are able to build to demand and are also restricting rental fleet sales, which are aiding residual values. Financing remains a challenge for some, though higher equity requirements are good for the discipline of the overall market. Investors like this sane market, evidenced by the stock prices for the two remaining public companies, Hertz and Avis Budget, which have both been on a steady rise for the past year.

We look forward to seeing you at next year’s Car Rental Show, but let’s not wait that long. Stay tuned for more information on the 2013 Auto Rental Summit.

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Author Bio

Chris Brown

Executive Editor

Chris Brown is the executive editor of Business Fleet Magazine and Auto Rental News for Bobit Business Media. Through these publications, online newsletters, trade events and associations, Chris covers all aspects of the fleet world, including fleet management, manufacturer fleet activities, the fleet leasing industry, vehicle remarketing, rental industry news, car rental taxation and legislation as well as automotive environmental initiatives and trends.

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