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An Approach to Alternative Fuel Vehicle Rentals

Essay by   •  November 28, 2010  •  Research Paper  •  1,674 Words (7 Pages)  •  1,195 Views

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An Approach to Alternative Fuel Vehicle Rentals.

As one of the leading car rental companies, Lotus car rental is in a position to take advantage of a great opportunity. This is an opportunity to be one of the first car rental companies to provide our consumers with alternative options to fuel-powered vehicles, and to rise above the competition. Adding alternative fuel vehicles to our car rental fleet will increase our car rental turnover and improve the company's image to consumers.

In this presentation, we will demonstrate that adding alternative fuel vehicles to our fleet of rental cars will reap tremendous rewards. This presentation will provide you with the advantages of providing alternative fuel vehicles and a cost benefit analysis. At the end of this presentation, you will see that alternative fuel vehicles will not only lower operating costs, but will also provide a new perspective on marketing campaigns and will set us apart from our competition.

With the rising cost of gas prices continuing to increase on a daily basis, renting a car is fast becoming a greater expense to business travelers and family vacations. Driving cross-country for the summer with the entire family is quickly becoming a thing of the past due to the expense. Business travelers and families can no longer afford to rent larger vehicles. Their only option is to settle for a smaller car or pay at the pump. At current gas prices, a 3,500- mile adventure would cost the consumer $7,140.00 in gas in a Chevrolet Astro, a common rental minivan. That is $206 more than the cost of the trip in an Oldsmobile Alero, a typical "midsize" car. For a family of four, the savings is almost enough to pay for an additional day of vacation. AAA surveys show families spend about $235 a day on food and lodging. The growing cost of operating the biggest rental cars is weighing on travelers. Gene Sloan (2004, July 2). Is there an alternative?

There is an alternative solution; a solution that will keep our operating costs down, keep fuel costs down, and keep our business travelers and families continuing to rent vehicles from us. We propose to introduce alternative fuel vehicles to our fleet of rental cars. Adding a fleet of alternative fuel vehicles to Lotus' fleet of rental cars will allow several leading advantages over the competition, which we will discuss in this essay. There are many types of alternative fuel vehicles manufactured in a wide range of vehicle models and classes. The most popular vehicles for consumers are the Natural Gas Vehicles and the Electric Vehicles. Some of the benefits of alternative fuel vehicles include reducing emissions, reducing energy dependence, and reducing dependency on petroleum for the transportation system.

One of the advantages includes growth opportunities for lotus car rental. Very few of our competitors offer alternative fuel vehicles to the consumer. In fact, there is only one Rental Company, nationwide, that has begun renting environmental vehicles. We must take advantage of the circumstances and introduce alternative fuel vehicles. Alternative fuel vehicles will also allow for growth in an untapped market of environmentalists who will ultimately be supportive of alternative fuel vehicles. This strategy will allow us the opportunity to be amongst the world's leading rental companies for alternative fuel vehicles. As the industry grows, our company will grow. Introducing alternative fuel vehicles to our consumers will set lotus car rental apart from their competitors and will provide a leading edge against our competitors. In addition, a fleet of alternative fuel vehicles on our fleet will soften our company's image to consumers and environmentalists.

Alternative fuel vehicles will allow Lotus to maintain a competitive edge and continued growth. Most AFV's do not use any petroleum products as fuel, and as a result have become so popular in the midst of increasing gas prices and the unstable foreign oil markets. The increasing cost of fuel and taxes on gasoline (has) a significant impact on Lotus car rental's operating costs. Currently soaring gas prices is a very controversial with business travelers and tourists. Alternative fuel vehicles will offer our customers an alternative to inflated gasoline prices. Our customers and our operating costs are greatly impacted when gas prices rise overnight.

The United States is (very) vulnerable to oil supply disruptions (Yucel 302). Imported oil now comprises at least 42% of total oil consumption, which is projected to increase over the next 20 years (Yucel 302). EV Rental Cars has accumulated over 5 million miles, a distance equivalent to circling the globe 200 times. The achievement is notable throughout the U.S. as the country explores alternatives to traditional oil resources, and is a testament to the growth of the environmental vehicle industry in the U.S. (EV Rental, 2001). Currently in the US, transportation energy usage is 97% petroleum-based (Simon, & Inglehart, 1997). Almost half of that petroleum is imported and the share is increasing. Using alternative fuels offers a chance to change that trend and instead use domestically produced fuels. This ultimately enhances US security by reducing the need to import and defend foreign oil. Our country's dependency on gasoline and disruptions to foreign oil supply threaten to not only cripple Lotus's marketplace position, but our country's economy as well. Adding a fleet of alternative fuel vehicles to our car rental fleet will (break) us, and our consumers from that dependency.

One of the most significant advantages for Lotus car rental is our ability to be the biggest low cost provider. We can provide the same size and type of vehicle for half the price of gas required by fuel-driven vehicles. By introducing a fleet of alternative fuel vehicles, our business travelers and families have the ability to rent any size vehicle without being concerned about the high gasoline prices.

Alternative fuel vehicles have recently experienced a rise in popularity partly because the federal government has rewarded incentives to consumers and corporations to own and operate AFV's. A one-time tax deduction of two thousand dollars per vehicle is available to those who purchase "clean fuel" vehicles. ("Tax Incentives," par. 3) Another incentive is a one-time tax deduction of 10% of the cost of the vehicles for purchasing AFV's. ("Tax Incentives," par. 12) The state of Georgia offers

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