Executive Summary 

Company Description

Wheelocity Car Rental provides electric and hybrid vehicles to public. We offer rental services on a daily, multi-day, weekly, and monthly basis. The fees of the vehicles are based on time and mileage. Our range of vehicles only include electric and hybrid vehicles. We offer vehicle sizes that fit the needs of our customers. These vehicle sizes range from compact vehicles to sport utility vehicles (SUV). We make renting a car as convenient as possible for our customers by offering delivery and pick up services for customer bookings. 

Location

9444 Miramar Rd

San Diego, CA 9212

Operations

Open for 365 days and our hours of operation are from 7AM to 7PM. (Opening and closing hours vary per delivery and pick up service).

Industry/Industry Code

Industry: Car Rental in the USA

Industry Code: NAICS 53211

Mission Statement

“Wheelocity’s mission is to provide customers with a unique and convenient car rental experience while reducing carbon footprint.”

Values

Wheelocity’s core values are simplicity, trust, respect, loyalty, and care:

Simplicity: We want our customers to enjoy a wonderful customer experience through fast and efficient service.

Trust: We gain the trust of our customers by being transparent with pricing and procedures. Detailed explanations of pricing and procedures help in gaining customers trust.

Respect: We treat everyone with respect. All of our employees, customers, and mechanics are treated fairly and kindly.

Loyalty: We want the loyalty of our customers and we achieve that by having special promotions for those who keep coming back.

Care: We care for our customers and we display this by making sure that all of our customers needs are met.

Pricing and Services

Wheelocity will take pride in offering on-site delivery and pick up services for the selected vehicle. Customers can also simply visit one of our locations to pick up the selected model. The delivery and pickup method will be a flat additional fee of $30 dollars within a 40 mile radius of a Wheelocity location. Additionally, Wheelocity is proud to be a pioneer in the car rental industry by exclusively offering environmentally friendly vehicles. This includes prioritizing electrical vehicles while also offering hybrid vehicles for customers that choose that option. Thus, the price will reflect that of electric and hybrid vehicles. 

To rent an electric sedan vehicle it will be $110 per day, a compact SUV will be $120 per day, and a full SUV will be $135 per day. Additionally, we take value in offering electrical vehicles, so the hybrid selection of vehicles will have a surcharge in order to persuade the customer to choose an electric vehicle. For a hybrid sedan, we will price it at $117 per day, a compact SUV will be $127 per day, and a full SUV will be $142 per day. Wheelocity will also be offering an optional car rental insurance. The insurance will consist of a protection plan that safeguards customers and the vehicle in the event of a collison and theft. The daily car rental insurance cost will be $60 dollars per day, which is accumulated in three segments. The loss or damage waiver will be $30, liability coverage will be $15, and personal accident insurance will be $15.

Additionally, Wheelocity offers roadside assistance to help with incidents such as lockouts or lost keys which is free of charge with car rental insurance or a flat fee of $10. Moreover, if a customer’s vehicle is faulty or undriveable, Wheelocity will offer a free exchange of a similar vehicle body. This includes delivery and pick up of the vehicle within a 40 mile radius of a Wheelocity location. Additionally, Wheelocity will be offering a 10% discount for active duty and retired military individuals. Lastly, Wheelocity will offer leased vehicles through partnership programs with both Hyundai and Ford dealership. Wheelocity strives to be the best and environmentally friendly car rental service and we feel that our offerings reflect that. 

Strategic Plan

Business Level Strategy

Wheelocity’s business strategy is centered around providing more convenience to customers, meaning we offer vehicle delivery to customers locations. Additionally, we hope to draw tourists with our electric-focused fleet and lower carbon emissions compared to traditional rental vehicle companies. One advantage we hope to utilize to keep costs low is the federal and state tax incentives for our electric fleet. Further, in the future, our fleet will maintain lower costs compared to our competitors due to new battery technologies. Finally, a focus on a simple and straightforward renting process, with a premium membership allowing for expedited, pick-and-go car rentals.

Competitors

Hertz

Hertz generates roughly $7 billion in revenue annually by providing rental vehicles to travelers, with many locations in prime service areas near airports. Hertz provides a range of vehicles to rent worldwide, from sedans to luxury and sport vehicles. Hertz recently underwent bankruptcy due to the COVID-19 travel slump. However, Hertz was able to recover by liquidating its fleet amongst used car shortages. Hertz has recently taken advantage of revitalized travel to raise a new round of investment for an order of 100,000 Teslas to strengthen their vehicle fleet (Forbes).

Avis

The Avis Budget Group consists of Avis Car Rental, Budget Car Rental, Budget Truck Rental, and Zipcar. Avis’ wide range of vehicle offerings and worldwide availability result in the largest revenues in the automobile rental industry, at just over $9 billion. Avis also provides vehicles for both tourism and commercial applications. A rewards program is offered for frequent renters, and offers a service where a renter can choose from a selection of luxury vehicle rentals. Zipcar allows Avis to provide customers with an alternative to car ownership by renting a car for just as long as customers need it, and parking it back in an assigned spot when they are done.

SWOT Analysis

Strengths 

Several of Wheelocity’s strengths are centered around customer satisfaction. Wheelocity makes the car rental process extremely user friendly with its vehicle delivery service. For a flat fee, customers can have their rental vehicle delivered to the location of their choice. Wheelocity also boasts an easy to use app. Customers can rent a car through their phone. This will appeal to the younger generation as they transition to make up a large part of the consumer market. Another strength is the loyalty program offered to valued customers. This loyalty program allows customers to earn future discounts by renting cars and referring friends to Wheelocity’s business. These benefits build strong customer relationships and brand loyalty. Wheelocity’s main product differentiation is offering exclusively EV’s and hybrids. Wheelocity is a trend setter within the industry and draws environmentally concerned customers to the business. This also creates a strong company image as Wheelocity is concerned with the environment and the community as a whole, rather than being strictly focused on profits. Another strength of Wheelocity is their employees. As a car rental business, Wheelocity does not need a high number of employees as, for example, a merchandise business would. Therefore, Wheelocity only hires extremely competent workers whose main goal is to create the best car renting experience a customer can ask for. 

Weaknesses

A weakness of Wheelocity is a limited supply of cars. Since Wheelocity’s business model revolves around offering exclusively electric and hybrid vehicles, the company is cut off from potential supply of gas consuming vehicles. Exclusively renting out hybrid vehicles also limits the potential market for Wheelocity. Many consumers want to rent a vehicle for long road trips. An electric vehicle might not be ideal for this as its range in electric charge is smaller than the range of a gas run vehicle. Another weakness is the high up-front costs Wheelocity endured. Wheelocity made a major investment to obtain inventory in the form of costly electric vehicles. Along with the investments into inventory, Wheelocity also accumulated immediate debt from insurance and facility expenses. This large amount of debt puts Wheelocity into a tight financial position. As a new company, Wheelocity has very few strategic allies within the industry. The lack of allies will limit the amount of exposure Wheelocity has to potential customers, especially compared to its competitors.

Opportunities

Demand within the car rental industry is expected to grow in the next five years. According to Shahool Al Bari’s industry report, “Car Rental in the US”, COVID 19 drastically impacted the demand for car rentals as non-US resident inbound trips declined 18.3% in 2021. However with COVID cases being low and with life going back to normal, non-US resident inbound trips are expected to increase by 26.6% over the next five years. This can be directly tied to higher demand for car rental services. The current lack of supply in the car buying market will also drive the demand for car rental services higher. Another opportunity for Wheelocity is to create strategic allies. Being allies with hotels and airports can allow Wheelocity to gain more market share and have their services be exposed to more consumers. 

Threats

One major threat Wheelocity faces is the growing popularity of ride-sharing services such as Uber and Lyft. These ride-sharing services are taking potential customers away from Wheelocity. For example, instead of having to rent a car from Wheelocity at an airport when traveling, a consumer could simply use Uber or Lyft to get around. According to the industry report “Car Rental in the US” by Shahool Al Bari, Uber and Lyft take away roughly 3% - 4% of revenue from car rental companies. Those percentages are expected to rise to 7% by 2026. As Uber and Lyft continue to grow, this threat becomes more and more concerning for Wheelocity as missing out on  3-4% of revenue can be devastating for a new company. Another threat posed to Wheelocity is the power held by the top companies within the industry. The top three companies, Enterprise, Hertz, and Avis hold over 50% of the market share. Each of these companies also hold strong strategic alliances with hotels and airlines where they offer their products. This is a major threat for Wheelocity as they break into the market.

Marketing Plan

Target Market

To be successful in business, it is absolutely essential for the company to understand who they should be marketing to by targeting a specific audience who will want their products. As 65% of revenue in this industry is generated from college students and young professionals, Wheelocity Car Rental aims to focus on marketing to this exact group to increase sales (Moses, 2021). However, since the company plans on specializing in renting out hybrid and electric vehicles, it is important to think about this aspect when deciding what marketing approach to use. The overall target market for the company is going to be young professionals who travel often, but also love to do everything they can to reduce global warming on the planet. Wheelocity Car Rental will be using several different marketing strategies in order to increase the number of customers and revenue.

Strategic Collaboration

As a car rental business, it can be quite difficult trying to find new ways to differentiate from the company’s competitors. The primary method of marketing will be through trying to team up with Ford and Hyundai. As they offer a great variety of different hybrid and electric vehicles to select from, it would be the perfect opportunity if we could make a deal with them to get a discount on a number of different cars. In this deal, both automakers could benefit from Wheelocity Car Rental purchasing multiple cars from them for a discounted price, and also free marketing as people get to rent their cars.

Wheelocity Car Rental also plans on finding a well known charity that is dedicated to saving the planet by trying to reduce our carbon footprint. As the target market focuses on traveling young professionals/tourists who love being eco friendly, it is a great idea to make it aware to customers that the company does not just care about money and business, as they aim to provide a cleaner alternative in the car rental industry, while at the same time donating a percentage of profits to a foundation that can do even more to help save the planet.

Mobile App & Website

Another method in which we will focus on marketing is with the mobile app and website. Both the website and free mobile app allows customers to filter through different specifications to find the perfect car for them. Once having found the car they desire, they can simply put their information into the secure database, in which we can then process their information to schedule for their car to be delivered directly to their home. Also, by signing up for the loyalty program through the website or mobile app, the customer can earn rewards by shopping at Wheelocity Car Rental. By becoming a member of the loyalty program, customers have access to earning discounts by returning to Wheelocity Car Rental and spending more money. When signing up for the loyalty program, customers also have the option to subscribe to our email newsletter for surprise promotions. This method provides the perfect opportunity to build a strong relationship with loyal customers.

Social Media

Also, Wheelocity Car Rental will be sure to maintain a very strong social media presence mainly on Instagram, TikTok, and Facebook. Some of the type of content that will be included is possible discounts, different car options we offer, and instructional videos describing some of the features the cars have to offer. Social media is a very powerful tool that the company will take advantage of to gain a following and loyal customer base. As the target market for the company is college students and young professionals, it is important to focus on this specific group, which is why social media is the perfect way to reach these potential customers.

Financial Plan

Our financial plan will describe the breakdown of expenses that will be incurred and used from the investment and as well as include areas for potential expansion and growth plans in the future. Wheelocity Car Rental will establish a leasing agreement and program with Hyundai and Ford for its hybrid and electric vehicles. The business aims to reduce costs by utilizing charging stations instead of gas stations. Ths business aims to deliver a happy and safe experience to customers through its innovative online car booking approach, fast car delivery at customers comfort, and the option for electric and hybrid cars to reduce carbon footprint and practice becoming environmentally friendly.

Start-up Expenses

Wheelocity will have a fleet of vehicles through business leasing programs that Hyundai and Ford will provide for the business. The business will also have a business license, office, office equipment, car cleaning equipment, computers, printers, high-speed internet, the payment of incorporation fees, business insurance, automobiles insurance, vehicle maintenance tools, a closed circuit camera system, executives medical and dental insurance benefits, and marketing efforts. Executives will receive bonus based on their marketing performance and metrics on how many customers an executive was able to connect to the business and offer services. Share per executive will also be based on business profits for the year.

Ongoing Expenses

Wheelocity Car Rental will have ongoing fixed and variable expenses like office utilities, insurances, the addition of new leasing vehicles to the fleet, servicing the fleet, parking lot rent for business cars, office rent, high-speed internet, marketing, and website maintenance. Wheelocity Car Rental chooses the vehicle leasing approach because vehicles in the fleet can lose their value after years and lose demand for its style. For that reason, selling them will incur a loss in value of vehicles. Vehicles that lose their demand in style and model, can take parking space when a vehicle is no longer of customers interest. Therefore, additional unnecessary charges may apply in such a case when an old vehicle model is in the business facility. In a vehicle leasing program or partnership with Hyundai and Ford, the business can establish relationships with the managers of Hyundai and Ford showrooms within Mira Mesa. The relationship helps the managers to inform the showroom employees to send and refer the customers to Wheelocity Car Rental when customers' vehicles are being serviced or repaired.

The business will be operated by the executives and founders of six individuals. Two of the executives will be on-site mechanics for emergency cases and cleaning services. They will also be drivers for vehicle delivery and pick-up services. Two executives will serve as front desk and marketing professionals, providing customer service and staying updated on website transactions and vehicle bookings. One executive will be responsible for a manager role to assign tasks and oversee other executive roles within the business environment. One executive will have some financial knowledge in financial matters and credit card transactions. Moreover, the insurance that is necessary to protect the business, vehicles, and executives, will be $700 per month. All business profits will be distributed equally by the end of every month.

Flexible Leased-Vehicle Financing

Additionally, Wheelocity Car Rental will make $24,000 in down payment in exchange for 15 vehicles. The business will sign an agreement with Hyundai and Ford on the flexible leased-vehicle financing option for businesses. Wheelocity Car Rental will enter a ComfortPlan for hybrid leasing where there is a fixed lease monthly payment of $150 per vehicle with maintenance. This approach helps the business to improve cash flow and reduce administrative costs. The leasing terms allow the business to recalculate and reevaluate every vehicle’s lease contract to avoid over-mileage charges or under-mileage credits. The leasing insurance helps the business have no residual risk.

Wheelocity Car Rental expects to add new leasing vehicles every 6 months, so the business will manage its cash flow and have enough money on-hand of at least $15,000 to $20,000 for such a lease. Servicing business vehicles will likely cost $500 per month. Office rent and parking lot space rent will be $2,500 per month. The business will allocate $500 per year on website and app improvements. Marketing will cost the business about $2,000. 

Marketing and Technology Expenses

There are three different selections of chargers available in various locations that can help executives and customers to charge the business’s electric and hybrid vehicles. The business wants to offer support and guidance on the moving technology and about the selection of charges with certain battery charging levels available for vehicles with different speed levels. To support drivers on the go, the business has an app available to show the most convenient, cost effective, and vehicle appropriate charging options and stations at all times. The app also helps executives of the business and customers to manage and complete vehicle registration, upload vehicle documents and customer driving license information digitally, upload accident scratches and incidents immediately, track and log personal and business mileage, and view vehicle delivery updates with step-by-step tracking of new vehicle bookings or orders or delivery employee location and estimated time of arrival.

The Wheelocity Car Rental app has a cloud-based programming installed that helps in the process of gathering vehicle data. The app makes it easier for the team of six executives to monitor driver behavior, fuel consumption and costs, maintenance trends and expenses, track vehicle location, and manage fuel use. The app helps in monitoring driving habits to improve safety measures and meet or revise compliance requirements. The business app is valuable in terms of keeping track of miles driven and time traveled for each vehicle. Lastly, the app offers customer driving behavior algorithms which helps in the process of revising the business model. The app helps determine customer behaviors by visualizing hybrid vehicle fuel costs and determining how those hybrid vehicles affect customers driving behavior such as harsh acceleration, braking, and idling.

Budget and Expense Breakdown

References

Al Bari, Shahool. (2021). IBISWorld Industry Report 53211. Car Rental in the US. Retrieved March 7, 2022 from IBISWorld database.

Dowd, K. (2021, November 7). How Hertz Went From Bankrupt To Buying 100,000 Teslas. Forbes. Retrieved March 7, 2022, from

https://www.forbes.com/sites/kevindowd/2021/11/07/how-hertz-went-from-bankrupt-to-buying-100000-teslas/

Mergent Online. (N.d.) Avis Budget Group Inc. [Company Profile].

Retrieved March 7, 2022, from

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Mergent Online. (N.d.) Hertz Global Holdings Inc. [Company Profile].

Retrieved March 7, 2022, from

https://www-mergentonline-com.ezproxy.csusm.edu/

Moses, J. (2021, July). Sign-In for Off-Campus Access | University Library | California State University San Marcos. Ibis World. https://my-ibisworld-com.ezproxy.csusm.edu/us/en/industry-specialized/od4343/products-and-markets