In addition, much of Budget ’s rental fleet was upgraded to include more luxury vehicles.īusiness travelers comprise car rental companies ’ largest customer base: fewer than 2.5 million frequent business travelers account for nearly 50 percent of all car rentals at U.S. fleet (composed of Ford and Lincoln-Mercury models) every six months. Following the reorganization under Beech Holdings, Budget replaced its entire U.S. automaker, in this case Ford, which had gained non-voting stock in Budget in the 1989 sale to Beech Holdings Corp. car rental industry, Budget entered into purchasing agreements with a major U.S. Consistent with nationwide trends in the U.S. ![]() rental companies, routinely upgrades its fleet, selling older cars and supplanting them with newer models. a holding company comprised of Budget management, Ford Motor Co., and Gibbons, Green, Van Amerongen -purchased 100 percent of Budget stock for $333 million.īudget, like all U.S. Twenty-nine percent of Budget ’s stock was purchased just one year later in a public offering. The company underwent a complete change in ownership in 1986 when the New York-based investment firm Gibbons, Green, Van Amerongen purchased Budget for over $200 million in a leveraged buyout. ![]() Repeal of the tax credit law meant that owners of the rental-car companies were no longer the recipients of tax exemptions for new car purchases. These changes, along with the repeal of the federal investment tax credit in 1986, signaled the restructuring of Budget ’s management. The decision, however, meant breaking from Budget ’s history of concentrating on the interests of smaller businesses and medium-sized corporations. The change in management policy was attributed to the company ’s desire to ensure greater efficiency and consistency in service, communications, and procedures throughout its expanding, worldwide system of rental agencies. With the initiation in 1983 of a program to convert from a franchising to an operating company, however, the company began to fidget with their winning formula. The company ’s franchising business formula propelled much of Budget ’s growth and commanding position in certain markets during its first 30 years. As the rental firm planned for a shift in focus as it headed into the 1980s, it began to experience turbulent times. Following an industry-wide trend, much of Budget ’s rental business grew to revolve around national and international airport locations.īudget remained a predominantly franchise-operated rental company until the late 1970s. In addition to consumer markets, Budget began to develop policies and programs designed for smaller businesses and medium-sized corporate accounts, and the car renter moved into limited national accounts. The company grew by more than 20 percent every year in the leisure market during its first two decades. By 1960, Mirkin had established the Budget Rent a Car Corporation and laid the foundation for a system of corporate and licensee-owned operations.īudget maintained a tight market focus on value-oriented leisure travelers throughout the 1960s and 1970s. The company consisted of Mirkin and his wife together they managed a fleet of ten cars, originally available at the rate of four dollars a day and four cents a mile. The company operates a fleet of approximately 232,500 cars and trucks from more than 3,200 locations including 825 airports in over 100 one hundred countries.īudget was founded in Los Angeles in 1958 when Morris Mirkin opened a small rental car company for personal renters seeking an inexpensive automobile. Though the company was founded as a service to “budget-minded ” leisure travelers, Budget has recently increased its selection of available automobiles and has made considerable inroads into the business market. ![]() The company has grown steadily throughout its 35-year history and has solidified its position within the increasingly important service sector. In the early 1990s the Budget Rent a Car Corporation ranked as the world ’s third largest car and truck rental system, with company-owned and franchise operations in more than 110 countries and in all 50 of the United States. Private Company Incorporated: 1960 Employees: 10,400 Revenues: $2.2 billion Stock Exchanges: New York SICs: 7514 Passenger Car Rental
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