Car Rental Service Business offers the service of renting automobiles and vehicles to tourists and the public for a short period of time ranging from a few weeks to a few months. The Car Rental Service Business has a large network of Rent-A-Car stores in every metropolitan city, airport, railway station, and public crowded area where they offer automobiles for rent. Today, we’ll discuss the PESTLE analysis of Car Rental Industry; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Car Rental Industry
Some of the main political factors in the Car Rental Industry PESTLE analysis of Car Rental Service Business are as follows;
I-Government Regulation
The road safety and travel government regulations for the Car Rental Service Businesses are very strict. They comprise road safety, proper maintenance of vehicles, full disclosure, and thorough analysis of the customer data before renting them the vehicle. However, car rental companies need to comply with the travel and road safety regulations of different countries to avoid any type of legal and regulatory disruption.
II-Trade Policies
The Car Rental Service companies import and export vehicles and automobiles from different countries across the globe. That’s where the role of a country’s trade policy comes into play, and it keeps on changing depending on the political government in power. For instance, the USA and the Chinese governments have a conflicted relationship, and their trade policy comprises a lot of regulatory requirements.
III-Political Stability
The stable political environment plays a key role in the growth of Car Rental Service Businesses and companies. In case of roadblocks, riots, procession, political turmoil, and looting incidents, people won’t feel safe and secure to travel alone with the rental vehicle. They don’t want to risk their lives and vehicle damages in case of any incident.
Economical Factors Affecting Car Rental Industry
Some of the main economic factors in the Car Rental Industry PESTLE analysis of Car Rental Service Business are as follows;
I-Consumer Spending Pattern
The consumer spending pattern is highly important in the particular economy. Various economic factors like interest rates, inflation, unemployment rate, and the country’s economic conditions impact the spending patterns of people. For instance, higher interest rates, a tough economy, and higher unemployment would compel people to decrease their spending. Instead, they prefer saving their capital resources due to various reasons.
II-Inflation
The country’s inflation rate is the other key economic indicator. It makes products and goods expensive and costly for many people. However, people won’t buy products and goods when the inflation rate of the country is higher and it requires them to decrease their spending due to limited income and uncertain economic conditions.
III-Currency Exchange Rate
The currency exchange rate is highly unstable and volatile and it keeps on changing depending on various factors. For instance, a small change in the exchange rate would increase the cost, expenses, and the price of automobiles higher; it negatively impacts the car rental business.
Social Factors Impacting Car Rental Industry
Some of the main social factors in the Car Rental Industry PESTEL analysis of Car Rental Service Business are as follows;
I-Shared Economy
The consumer market interests have shifted towards a shared economy where people would like to share things like ride-sharing, procurement of used products, and other recycling activities. Such shared economy trends are promoting the growth of Car Rental Service Business, because people want to share and rent vehicles temporarily rather than permanently.
II-Inclusive and Diversity Culture
The consumer market has shown a great interest in inclusion and diversity. Car Rental Service Businesses and companies should run inclusive and diverse marketing and advertisement campaigns to target and attract various segments of the customer market. It allows the car rental companies to earn the trust and confidence of the customer market and maintain the inclusion and diversity status.
Technological Factors Affecting Car Rental Industry
Some of the main technological factors in the Car Rental Industry PESTEL analysis of Rent a Car Business are as follows;
I-Autonomous Vehicles
Automobile companies are developing autonomous vehicles in various cities and states across the globe. Autonomous and self-driving technology is further promoting the car rental business by making transport and travel safe and secure.
II-AI and ML
Automobile companies are employing the latest and advanced technology like AI, ML, and automation to make traveling and transport a comfortable experience. The Car Rental Service Businesses are also installing the GPR and tracking system technology in their vehicles to further safe and secure their business.
III-Electric Automobiles
Automobile companies are launching electric vehicles to target the eco-friendly and sustainable customer market. They are budget-efficient, cost-effective, and environmentally friendly. Car Rental Service Businesses should also include electric vehicles in their portfolio to target the eco-friendly customer market.
Legal Factors Impacting Car Rental Industry
Some of the main legal factors in the Car Rental Industry PESTEL analysis of Rent a Car Business are as follows;
Regulatory Compliance
Car Rental Service Businesses should comply with the regulatory requirements of different countries. It comprises road safety traveling regulations, vehicle maintenance regulations, import and export regulations, trade policies, driving licenses, state approval, and other legal and regulatory requirement. Compliance with regulatory requirements would help the company to smoothly perform its operations without disruption and delays.
Environmental Factors Affecting Car Rental Industry
Some of the main environmental factors in the Car Rental Industry PESTEL analysis of Rent a Car Business are as follows;
Sustainability Initiative
The automobile industry has shown a strong commitment to environmental sustainability. They’re taking various steps like building electric vehicles, fuel-efficient vehicles, sustainable and recyclable materials, and others to decrease the carbon emission rate.
Conclusion: Car Rental Service Business PESTLE Analysis |PESTEL Analysis of Rent A Car |External Environmental Analysis of Car Rental Industry | Strategic Analysis of Car Rental Industry
After an in-depth study of the pestle analysis of car rental industry; we have realized that Car Rental Service Business is the world’s most profitable business. If you are learning about the Car Rental Industry PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
