SIXT: Consolidated Rent-a-Car (ConRACs) & US Market Challenges

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This was going to be one of my later questions, but let's address it now since it has come up organically. What is the stated strategy for how SIXT plans to gain market share in the US? The US market is quite mature with many players, so there must be some idea of what they think they can do differently or better. In your view, to what extent are they achieving that?

One unexpected challenge they faced is that US airports are largely governed by quasi-government controllers, airport authorities, who have contractual obligations to other car rental operators. There are specific rules about when new players can enter a particular airport. In Europe, it's different; you can approach the airport authority directly and negotiate for space. In the US, you have to start small. SIXT's strategy, which I believe still holds, is to pursue mergers and acquisitions. They focus more on acquisitions, which is how they initially entered airport locations by purchasing smaller car rental companies. This strategy allowed them to gain the necessary space to operate and begin the long journey of capturing market share. Another interesting aspect is that your market share is directly related to the amount of space you are allowed to operate in. This makes it challenging to grow the business when you are physically constrained by the number of spots at the counter or spaces in the lot.

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This technology could potentially be adapted for airport rentals. For instance, you could notify the app when your plane lands, and it would direct you to a car parked near the airport. If the car isn't there yet, someone could drive it to sync with your arrival. I wonder if such a model could disrupt the industry or be interesting enough to gain market share.

One problem in the US car rental business is the lack of customer loyalty. Historically, everyone offers the same cars, like a Chevy Malibu, whether it's from Hertz, Avis, or National. The cars are the same; only the prices differ. What you're describing could attract seasoned travelers or those who use car sharing, allowing them to do business virtually as part of a car-sharing network. How big that market is, I'm not sure.

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