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Our marketsEurope
Over 86% of Avis Europe's revenues in 2009 were generated
in the five major markets of France, Germany, Italy, Spain and the
UK.
The European industry is characterised by a small number of
major car rental companies including Avis Europe, Hertz and
Europcar (which operate through a combination of corporately-owned
and franchised operations), large national vehicle rental companies
and numerous small companies primarily servicing their own local
markets. This fragmentation of the industry makes the measurement
of market data difficult.
There is little external data available regarding the car
rental market on a European-wide basis, the latest being
Datamonitor's European Car Rental Report 2009, which is based on
actual and estimated revenues for 2009.
 Market
size
Datamonitor estimated that €10.9 billion of car rental
revenues were generated in Europe during 2009. The largest
countries by revenue were Germany (20%), the UK (19%), France
(17%), Spain (11%) and Italy (10%). During this year, Datamonitor
estimated that a combined fleet of approximately 1.2 million
vehicles was employed by the car rental industry, representing a
decline of 8% compared with 2008.
Growth
drivers
Growth has historically
been closely tied to general economic activity levels and, in the
case of rentals from airports, to airline passenger volume
growth. From this
perspective the operating environment in 2009 was extremely
difficult for the car rental sector with recessionary conditions in
most of the Group's markets, both in
Europeand internationally. The Economist
Intelligence Unit (EIU) reported an estimated decline of 4% in
euro-area GDP for 2009 compared with growth of 0.6% (restated) in
2008. The International Air Transport Association
(IATA) reported a decline of 5.3% in European passenger numbers in
2009 compared with growth of 1.8% in 2008. Datamonitor
estimates that the overall fall in the car rental market in 2009
exceeded the declines in GDP and airline passengers, being around
9% and reflecting its exposure to the discretionary element of
consumer spending.
In 2010, economic growth rates are forecast to return to
positive territory, albeit remaining weak, with the overall demand
outlook in the Group's main markets expected to remain difficult
and uncertain. As at January 2010, the EIU was forecasting growth
of 0.8% in euro-area GDP in 2010 followed by a 1.2% increase in
2011, with UK GDP forecast to grow by 0.7% in 2010 and by 0.8% in
2011.
Growth expectations for the airline sector tend to be higher
than GDP growth, driven in part by structural trends, in particular
by the continued growth of low cost airlines. IATA currently
forecasts growth in passenger traffic for flights in Europe of 4.5%
for 2010.
In terms of the car rental market Datamonitor is forecasting a
further decline in 2010 of around 4%, followed by growth of around
7% in both 2011 and 2012.
Market
Composition
The car rental market is generally categorised either by the
type of customer group, (Leisure, Corporate, Insurance/Replacement)
or by the location of rental (airport, non-airport). In 2009,
approximately 47% of the market was estimated to be Leisure, with
39% being Corporate and 14% being Insurance/Replacement business.
During 2009, 40% of the industry's revenue came from airport
rentals, with 60% attributable to non-airport locations.
Competition
The European car rental market is primarily comprised of three
large multinational companies that comprise around 60% of the
overall market. The Datamonitor research referred to earlier shows
that the Avis and Budget brands have the second highest aggregate
market revenue share in Europe at 18.2%*.
The combined Europcar and Vanguard Group (including the
National and Alamo brands) holds the leading position in the
European market place with a reported share of 22.8%. Hertz is the
third largest operator with a reported market share of 12.8% in
2008*. There was further consolidation during 2009 as a number of
smaller car rental operators ceased trading or entered financial
administration, due to the difficult market conditions and
decreased availability of credit, particularly in Spain and the
UK.
In specific markets we face competition from other car rental
operators. For example, Sixt is a major competitor in Germany with
a share of 21.1% in that market and Enterprise in the UK holding
12.9%* of that market (source: Datamonitor's European Car Rental
Report 2009). There are a large number of smaller-scale operators
with strength in particular markets (notably the Mediterranean),
examples being Maggiore in Italy and ADA in France.
It is noteworthy that the Group operates two of the four
established global brands, Avis, Budget, Hertz and Europcar
(Vanguard).
European car
rental market shares by brand
 * Includes Budget brand 3.3%
** Includes Vanguard brand
7.3%
Source : Datamonitor European Car
Rental Report 2009; market shares are based on 2008
revenues, with 2009 data not yet available
Scandinavia, Central and Eastern
Europe
Avis began operations in Scandinavia over 50 years ago
and now has the widest network covering the Region.
Avis was also the first rent a car company to be represented
in every country in Central and Eastern Europe. With strong growth
prospects, as evidenced by the expansion of the European Union
eastward, Avis is very positive about its future in this fast
emerging territory. Recent network expansion has focused on
Russia.
Africa, Asia and Middle
East
Africa
Avis Europe is represented in 85% of the region, more than any
other international car rental company, with services at all
international airports across 38 countries. The prospective growth
in Africa and the Indian Ocean give Avis confidence in the future,
particularly in key markets such as Southern Africa, Morocco,
Tunisia and Nigeria.
Asia
Avis Europe acquired the licence to operate in 27 territories
in Asia at the time of its flotation. This provided the company
with access to a vast new market representing over 60% of the world
population in one of the most dynamic regions of the global
economy, whilst further enhancing its international presence.
Asia is a key long-term growth region, and Avis became the
first international car rental company to enter into equity Joint
Ventures in the two strategic markets of India and China. Avis
India opened in 1999 and Avis commenced trading in China in January
2003, through the signing of an agreement with a subsidiary of
Shanghai Automotive Industry Corporation, one of China's largest
automotive groups. Avis now operates in 20 cities with 26
locations in China.
Middle
East
Avis Europe began operations in the Middle East more than
40 years ago and is currently represented in over 90% of the
region, serving a population of over 120 million. The operation in
Israel, together with the newer Budget brand, is listed on the
Tel Aviv Stock Exchange.
CustomersThe Group classifies its customers as Individuals; Corporate
and Insurance/Replacement.
Individuals
These customers are individual travellers booking directly or
indirectly through travel companies, tour operators, partnership
arrangements and brokers.
To support business from individual customers Avis has an
extensive portfolio of over 70 international partnerships with the
world's airlines, railway networks and other leading travel
companies.
The individual customer category is more seasonal than the
corporate customer category, with demand peaking over the key
holiday periods. Individual customers are
principally attracted to Avis by it's widespread network,
quality of service, reliability, brand, website and competitive
prices.
Corporate
Corporate customers book via negotiated arrangements with
their employers and through vehicle replacement companies.
The corporate customer category displays a relatively even
pattern of demand throughout the year. The key
requirements of corporate customers are competitive prices, speed
and quality of service, reliability, availability of management
information and geographical coverage.
Insurance/Replacement
These customers come through insurance and leasing companies,
vehicle dealerships and repair shops with which Avis has a direct
contractual relationships.
This category also displays a relatively even pattern of
demand throughout the year and customers' requirements are similar
to those in the corporate segment.
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Registered Office: Avis House, Park Road, Bracknell, Berkshire, RG12 2EW. Registered Number: 3311438. © 2000-2008 AVIS Rent A Car
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