Companies in this industry rent and lease a wide range of physical assets, including cars and trucks, consumer goods, and commercial and industrial machinery and equipment, as well as nonfinancial intangible assets. Major companies include Aaron's, Avis Budget Group, Hertz Global Holdings, U-Haul, and United Rentals (all based in the US) along with AerCap (the Netherlands), Ashtead Group (UK), LeasePlan (the Netherlands), Sixt (Germany), and Tokyo Century Leasing (Japan).
Demand is driven by personal income and industrial activity. The profitability of individual companies depends on maintaining the right merchandise mix and controlling inventory financing costs. Large companies have economies of scale in purchasing, distribution, and advertising. Small companies compete effectively by providing superior customer service, alternative products, and catering to local demographics.
Products, Operations & Technology
Major sources of revenue for companies that rent and lease physical assets include passenger cars and light trucks (about 24% of sales for the industry in the US); other commercial and industrial equipment (20%); construction, manufacturing, mining, and forestry equipment (11%); heavy trucks, trailers, and buses (10%); and rail, air, and water transportation equipment (8%). Other sources of revenue include pre-recorded electronic media, home health care equipment; and office machinery, furniture, and equipment. For companies that lease nonfinancial intangible assets, major sources of revenue are licensing of intellectual property (55%) and franchising (40%).