The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Isaac Pino discusses topics around the investing world.
In today's edition, Isaac discusses the upstart car-sharing company Zipcar. The road was once wide open for Zipcar, but now all types of car companies, from rental agencies to original equipment manufacturers, are causing traffic congestion. Still, Zipcar maintains a significant head start because of its customer base, which far outpaces rivals in the U.S. and in key markets within the U.K., Canada, and Spain.
Sources: Zipcar SEC Filings, car2go June 13, 2012, press release, gigaom, and The Journal Gazette.
Further, Zipcar touts a vast network of vehicles in these markets, with highly attractive parking spaces offering a convenience advantage that rivals will have difficulty replicating in the near future.
Sources: Zipcar SEC Filing, car2go June 13, 2012, press release, gigaom, and The Journal Gazette.
While Zipcar boasts the largest car-sharing fleet,the stats in that last chart could shift rapidly in favor of Enterprise and Hertz as they begin to leverage their existing car-rental fleets, which measure in the hundreds of thousands of vehicles around the United States. The increased interest in this hot market is likely due to estimates by research companies such as Frost & Sullivan, which believes the market for car sharing could exceed $10 billion by 2020. Isaac believes the new entrants represent an endorsement of the industry as a whole, and Zipcar's competitive advantages should keep it at the front of the pack.
When the big auto manufacturers like Daimler inch their way into the car-sharing market, you know this transportation niche could become a powerful force in the future. Bill Ford, Ford's executive chairman, remarked recently, "We don't know where car-sharing is headed, but Ford wants to be a part of it." Many investors in Ford might be unaware of the tremendous growth prospects ahead for this automaker. Find out whether Ford's stock is set to soar or whether hidden risks could hold back shares by readin our in-depth premium research report that ultimately answers the one big question: Is Ford a Buy Today? Simply click here to access this report that every current or potential Ford investor needs to see.