Rental-car giant rewrites the rules
Avis long ago made its name as the company that would "try harder" to win customers from industry behemoth Hertz in the U.S. car rental business.
But these days it's Enterprise Rent-A-Car Co. that's No. 1, a position it has earned in large part through its continuing growth in California, the company's biggest market.
In 2005 privately held Enterprise registered an industry-leading $9 billion in global revenue, placing it ahead of those iconic competing American brands.
California accounted for 16% of Enterprise's U.S. sales total. The company's 850 California offices bought more than 120,000 new vehicles from dealerships around the state this year, worth about $1.4 billion and representing 20% of Enterprise's total purchases nationally.
The success of his division gives Greg Stubblefield a lot to brag about, and the former UC Berkeley lineman isn't slowing down.
"We see tremendous growth on the horizon for us in California," said Stubblefield, 45, president of Enterprise's California-Hawaii division. It's a job, he said, that earns him lots of jealous glares at wintertime corporate gatherings at Enterprise headquarters in St. Louis.
His plans are defined not by specific goals and timetables, he said, but by a conviction that opportunities exist in Enterprise's main business of renting to local residents and in several only-in-California niches.
"Enterprise is widely regarded as an extremely well-run company," said Michael Gallo, an analyst who follows the rental-car industry for investment firm CL King & Associates Inc. in Albany, N.Y. Strategies such as Stubblefield's are part of the reason.
One priority is to expand Enterprise's entertainment business in California.
"Those cars you see parked on the streets or filling parking lots in movies and TV series? It's not chance, it's all staged," Stubblefield said. "And a lot of the time they are rented from us."
All of the Cadillac Escalade sport utility vehicles in a lengthy downtown Los Angeles chase scene in "Mr. & Mrs. Smith," the 2005 Brad Pitt-Angelina Jolie action comedy, were rented from Enterprise.
The entertainment unit, operating from downtown Los Angeles, also supplies high-end cars, such as Cadillacs, Lincolns and Mercedes-Benzes, to production companies that provide them to executives and actors when they are shooting on location.
That has helped give rise to a fairly new business for Enterprise: a luxury-car rental unit for the rest of us. The group, also headquartered in Los Angeles, offers cars from Mercedes-Benz, Lotus, Porsche, Jaguar and other high-end manufacturers.
Noting that in California "the car you arrive in becomes part of your identity," Stubblefield said he expected a growing business in rentals to drivers who want to make an impression without a huge capital outlay.
Another market for the unit: potential buyers who would like more behind-the-wheel time, beyond the typical dealership test drive, before purchasing an expensive car.
In addition, Stubblefield said, Enterprise plans to add to its conventional fleet in California, increasing the number of local offices and working to boost business at its 20 airport locations.
Enterprise aims to grow even as the struggling U.S.-based automakers vow to slash their heavily discounted sales to rental car firms.
Detroit may be cutting back on fleet sales, "but that just means that the total number of cars available will go to a smaller number of firms, six or seven of the big ones rather than 20 to 30 of all sizes," Stubblefield said. "It's the smaller players who will get a smaller share. We usually get what we need."
That's because Enterprise is the industry's 800-pound gorilla: In 2005 the company bought 3.5% of all new passenger cars and trucks sold in the U.S.
"We buy cars in California from hundreds of individual dealers," said Stubblefield, who joined Enterprise as a management trainee after graduating in 1982 with a social science degree.
News was from http://www.latimes.com/
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