Avis 2006 Annual Report Download - page 17

Table of Contents
usability of booking systems, ease of rental and return and other elements of customer service. In addition, competition is influenced strongly
by advertising, marketing and brand reputation. We compete primarily with the following car rental companies: Hertz Global Holdings, Inc.,
Vanguard Car Rental USA Group, which operates the National Car Rental and Alamo brands, Dollar Thrifty Automotive Group and Enterprise
Rent-A-Car Company.
Truck rental business
Operations
Budget’s truck rental business is one of the largest local and one-way truck rental businesses in the United States. The Budget truck rental
business has a combined fleet of approximately 30,500 trucks, with a median truck age of less than two years old, which are rented through a
network of approximately 2,400 dealers, 210 company operated and 100 licensee operated locations throughout the continental United States.
The Budget truck rental business serves both the consumer and light commercial sectors. The consumer sector consists primarily of individuals
who rent trucks to move household goods on either a one-
way or local basis. The light commercial sector consists of a wide range of businesses
that rent light- to medium-duty trucks, which we define as trucks having a gross vehicle weight of less than 26,000 pounds, for a variety of
commercial applications. In 2006, the Budget truck rental business generated total revenue of approximately $472 million.
We primarily advertise in “yellow pages” telephone directories to promote our truck rental business to potential customers. Budget truck rental
customers can make reservations through the Budget truck rental reservation center toll-free at 1-800-GO-BUDGET, through our Budget truck
rental website at budgettruck.com or by calling a location directly. In addition, we have established online affiliations with websites like
moving.com to reach our targeted audience. Budget truck rental reservations may also be made through the budget.com website.
During 2006, we announced plans to close the headquarters of our truck rental operations in Denver and integrate Denver-
based operations into
existing car rental facilities during first quarter 2007. In connection with this restructuring, we eliminated certain positions and significantly
reduced separate senior management for our truck rental operations.
Distribution
Budget’s truck rental business is offered through a national network, which included approximately 2,400 dealers as of December 31, 2006.
These independent dealers are primarily self-storage facilities, rental centers, hardware stores, service stations and other similar service
retailers. In addition to the dealers’ principal businesses, the dealers rent our light- and medium-duty trucks to consumers and to our
commercial accounts and are responsible for collecting payments on our behalf. The dealers receive a commission on all truck rentals and
ancillary equipment rentals. Generally, dealership agreements may be terminated by either party upon 30 to 90 days’ prior written notice.
Competition
The truck rental industry is characterized by intense price and service competition. We compete with a large number of truck rental companies
throughout the country, including U-Haul International, Inc., Penske Truck Leasing Corporation, Ryder System, Inc., Enterprise Rent-A-Car
Company and many others.
Seasonality
Our truck rental operations are subject to seasonal demand patterns, with generally higher levels of demand occurring during the late spring and
summer months when most self moves occur, with the third quarter typically being our busiest quarter. Generally, December is also a strong
month due to increased retail sales activity and package deliveries.
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