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Lessons from The West for Chinese Rental Car Executives Mike Kane VRCG, Inc. 2013 Car Rental Show Las Vegas.

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Presentation on theme: "Lessons from The West for Chinese Rental Car Executives Mike Kane VRCG, Inc. 2013 Car Rental Show Las Vegas."— Presentation transcript:

1 Lessons from The West for Chinese Rental Car Executives Mike Kane VRCG, Inc. 2013 Car Rental Show Las Vegas

2 Mike Kane VRCG, Inc. 35 Years Experience 20 Years with Enterprise VRCG is 12 years old We: – Buy cars – Sell cars – Move cars – Stay in business 2

3 What Chris Brown asked me to do… Distill what I know successful rental companies have done in North America Offer some views as to what any successful rental company, to a greater or lesser degree, must continue to do remain competitive Give you a “take away” that you might be able to implement when you go home Thank you for coming…I know that time and money is a big commitment 3

4 Your Organization – General Categories of what you need Capital/Money Insurance How to Buy Cars How to Sell Cars How to Fix Cars Marketing Plan Customer/Operations Expertise Administrative Expertise A shareholder/owner Culture ….And a “People Plan” to execute it all 4

5 Money/Capital Without capital and/or borrowing capacity, your ability to expand in a capital-intensive industry will be limited The best companies have strong balance sheets, very conservative approaches to spending, and believe in keeping their “powder dry” Enables you to expand when others contract, or weather financial storms 5

6 Insurance As China becomes a bit more Western, beware the rise of lawyers Ensure you are covered for unusual occurrences, which in turn become usual Scams abound Subsets are loss control, vehicle repair/subrogation/ etc. but this needs to be a core competency 6

7 How to Buy Cars You aren’t really in the car rental business; you are in the “car business” and you should realize this A high level person or group in your company needs to focus on this every day If depreciation/car costs are >40% of revenues, find another business. Target 27.5%-35% of revenues 7

8 …This is minimum of what a fleet planner should spend their time on! 8

9 How to Sell Cars See previous slide! Explore every available “sale channel” such as dealer direct, auctions, retail, etc. The remarketing group must understand their numbers (next slide) Fixing cars is a subset of this…must keep them the road, safely and economically, to keep fleet utility up 9

10 Calculate Your Holding Cost $20,000Capitalized Cost of Unit - $16,500Operated it for 14 Months $ 3,500Actual Total Depreciation $3500/14 months = $250 actual month dep. Or 1.25% per month Then add Interest Costs You can also drill this down to “depreciation per day” if you’d like, to compare to your daily dollar average or average daily rate 10

11 Marketing Plan Define who your client base is – Airport? – Local? – High end/luxury? – Commercial / truck / etc.? – Beware trying to be all things to all markets Web presences Deals with Orbitz, Travelocity, etc. Deals with smaller reservations entities (ACE, etc.) This is a huge deal and will get ever-bigger 11

12 Customer-Facing Operations This is how you keep customers coming back This is also how you drive them away There are 100 things that can go wrong It’s very detail oriented with 25 ways to make, or lose, money A balancing act where all the things we’ve talked about come together for a good, or bad, or profitable, or not, experience 12

13 People/Employee Plan Without a good people/Human Resources plan, your business will not do well Company Culture is bedrock and must be set by ownership Without good people, or at least trying to get good people, you’ll not do well This process never ends. People change jobs all the time. 13

14 Where Does Your Company Stand? Good Culture and sharp owners? Good operators in all the different areas of the business? Trying to get better all the time? You’ve picked a tough industry - without constant improvement your chances for success decreases 14

15 Contact Mike Kane or Dave Arney Royal Oak, Michigan mkane@vrcg.com 248-298-0509 www.vrcg.com 15


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