Investing in rental car companies can be scary. Any global event that decreases travel directly impacts rental car companies. Recessions -- when rental car companies buy new cars but can't find buyers for their old cars -- hurt rental car companies. The shift among business travelers from rental cars to ride-hailing services harms rental car companies. And if auto manufacturers truly develop autonomous cars that can be shared, where does that leave rental car companies? The annual shareholder reports from rental car companies list scores of potential risks to operations, yet there are still individuals willing to invest in rental car companies, hoping for a brighter long-term future. The shares of AvisBudget Group (CAR) and Hertz Global Holdings (HTZ) both spiked with the news that they were managing small fleets of cars for companies exploring autonomous vehicles. What options are available to potential investors who want to get involved in the rental car game, knowing that the largest company (Enterprise Holdings -- owners of Alamo, Enterprise, and National) is family owned and smaller companies (like Advantage and E-Z) are owned by private-equity firms?
Note: The following is a listing of rental car companies that are publicly traded. These options are ordered by market capitalization (largest to smallest) as of November 2017. AutoSlash is not a financial advisor and makes no recommendation on investment in any company. If we had billions of dollars to spare, we would invest in many activities other than capital-intensive rental car companies.
- Sixt DE (XETRA: SIX2) -- Originally a family-owned firm and known for edgy advertisement and excessive use of the color orange. The Chief Executive of Sixt is still a member of the Sixt family, with good reason -- over 60% of the company is owned by the Sixt family, which makes shareholder votes easy to tally and confirm.
- AvisBudget Group (NASDAQ: CAR) -- AvisBudget Group operates Avis, Budget, Payless, ZipCar, and Italian company Maggiore. The company continues to scrub references to owning Payless in their documentation, as class action lawsuits are among those investment risks of major rental car corporations.
- Europcar (Euronext Paris: EUCAR) -- Based in France, Europcar was once owned by Volkswagen and a partner of Enterprise Holdings, operating Alamo and National locations in Europe in the past. Publicly traded since 2015, the company has recently purchased Buchbinder and agreed to purchase Goldcar.
- Hertz Global Holdings (NYSE: HTZ) -- Hertz Global Holdings operates Dollar, Hertz, and Thrifty. The largest single shareholder of HTZ? Carl Icahn, who currently holds almost 35% of the entire corporation.
- eHI Car Rental (NYSE: EHIC) -- Sounds a bit like EHI (Enterprise Holdings)? There's a good reason. Although the ADR is traded on the New York Stock Exchange, eHI is the current partner of Enterprise Holdings in China.
And despite what appears to be few major global competitors, it's not an exceptionally profitable industry. Still harbor doubts about how competitive and challenging the rental car industry remains? The market capitalization of Apple alone is 90 times that of Sixt, AvisBudget, Europcar, Hertz Global Holdings, and eHI combined. Unless/until something changes drastically in the industry, it's always going to be hard to make truckloads of money renting $30,000+ cars for $40 (or less) a day!