Market Snapshot - Japan

Times Mobility Networks Co., Ltd. (MAZDA Rent-A-Car)

Established in 1965, MAZDA Car Rental Corp. was sold by Mazda Motor Corp. in 2004 to an investment company, which in turn sold it to Park24 Co., Ltd., a publicly traded car park company on the Tokyo Stock Exchange. This year, Park24 transferred the car sharing operation to Times 24 Co., Ltd., a new subsidiary. Park24 also changed the official name of MAZDA Car Rental Corp. to Times Mobility Networks Co., Ltd. (TMN) though the car rental service continues to use the brand name MAZDA Rent-A-Car.

• Total locations (May 2011): 439

• Airport: 53, Local: 386

• Corporate stores: 192, Franchisee locations: 247, Fleet size: rental car: 21,975, car sharing: 2,260

• Breakdown of business: Leisure: 30%, corporate: 35%, replacements: 20%, tour: 10%, other: 5%

• Car Procurement method: Purchase and lease. There are no buyback programs in Japan.   

• Average hold times: N/A. (General averages in Japan: small, intermediate: 24 months, luxury: 36 months)

• Popular rental models: subcompact Mazda Demio (Mazda2)

• Primary ancillary sales: Child seat, CDW

• Primary remarketing channel: auction

• Recession impact: Shorter rental days, and a move toward car sharing to cut personal spending. Times 24 Co., Ltd.'s car sharing system offers rentals in 15-minute increments.

• Business boost: As part of a government tourism campaign, visitors from overseas countries, especially from Asia, are increasing and are renting cars during their trips. Japanese car rental companies have referral contracts with overseas car rental companies and travel agents that funnel customers through these networks. TMN began an affiliation with Europcar in 2006 to strengthen its inbound business.

• Business hassle 1: Car rental companies must manage the fact that driving is only allowed for overseas tourists with driver's licenses issued through the Geneva Agreements.

• Business hassle 2: Per a revision of traffic law in 2006, car rental companies must pay parking violation fines incurred by renters. Car rental companies closely monitor violations and train rental agents on how to mitigate violations.

• Environmental initiative: TMN is presently testing six Mitsubishi i-MiEV electric cars in its car sharing fleet.

• Environmental initiative 2: As of April 2004, all Japanese car owners, including car rental companies, receive a tax break for buying a more environmentally friendly car.

This has resulted in a car rental fleet of smaller vehicles, though it is also based on customer demand for smaller vehicles.

An industry deals with disaster

In the wake of the March 11, 2011 earthquake and tsunami in northeastern Japan, Japanese car rental companies are not only suffering supply issues, they must rebuild infrastructure and assist in the relief effort, according to the Japanese Car Rental Association.

The Association reports that car rental companies are having difficulties in meeting customer demand. The rental car supply is worsening into the beginning of the summer season due to the lack of supply of new cars. To help meet demand, car rental companies are keeping cars that they would have sold.

Because of the disaster, normal seasonal car rental demand has dropped, though car rental companies are supplying cars in the disaster area for reconstruction efforts.

Park24 Co. Ltd., owners of TMN, reported heavy tsunami damage to its locations in Ishinomaki and the Sendai Airport, though the company reported no employee casualties.

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Market Snapshot - Australia

Bayswater Car Rental

"My father started renting out cars from the family home in Perth in the late 1950s," says Arnold Kluck Jr., director. "He did this because as a taxi driver-owner, the government restricted him to a maximum of four taxis. Car rental seemed like a natural progression."

In 1988, Kluck moved to Sydney with his brother to start the business there. Kluck's father still runs the Perth offices with another son. Bayswater is the largest independent car rental company in Sydney and Perth.

• Total locations: 1 in Sydney, 4 in Perth

• Fleet size: 2,500

• Breakdown of business: Mainly local, leisure, insurance replacement. Local 60%, interstate 30%, international 10%

• Car procurement method: 100% buy. Buyback programs are not very common in Australia. Finance and leasing dominate.

• Average hold time: 30 months. Before the recession, average hold time was 24 months.

• Popular rental models: Entire fleet is white Toyota Corollas.

• Ancillary sales: "We cater to the frugal end of the market," says Kluck. "We've found this price point works with our budget conscious customers, with most clients buying at least one ancillary product. We also charge for interstate driving, underage drivers and electronic toll service."

• Primary remarketing channel: "We sell our old Corollas to Toyota dealers for new replacements. There seems to always be retail demand for a white Corolla, which keeps the dealers interested. The used car market has held steady in Australia, as opposed to the boom-bust cycle in North America."

• Marketing/advertising: "We have had an on-going quirky 'No Birds' campaign for 30 years. It means no frills. People think we are crazy for running such an obscure slogan, and maybe they are right. Our frontline staffs get asked dozens of time each day 'What does 'no birds' mean?'

A large portion of our fleet has yellow 'no bird' decals on the front doors. This increases our profile. We also spend 'more than we should' on the Internet and in local newspapers."

• Recession impact: "The first couple of months were slow, and then the federal government started handing out money ($1,000 to individuals and $2,000-4,000 to families) straight into personal bank accounts. The next 18 months we were flat out and have never been busier. The government also gave tax breaks for buying cars, which helped too. The Australian economy rebounded strongly, so these government measures have long since been wound back. But it was good while it lasted."

• Legal/legislative threats: "At this stage there is no vicarious liability for rental cars in Australia, although local authorities and insurers are always pressuring and testing this. Australian state governments have limited taxation powers compared to the USA. Therefore, they tend not to single out the car rental industry."

• Biggest business challenge: "Marketing. The Internet has massively changed the way we market ourselves. It is a continual challenge to manage Internet marketing, social media and traditional press."

• Industry comparisons: "We came to the Car Rental Show expecting to see differences in the way North America does business compared to Australia. We were surprised how similar they are. The Australian car rental market is a mature industry and we feel our growth comes mainly at the expense of competitors that fail to keep up."