Alternative Fuel Vehicles:
There are many things to keep up with in the automotive industry. As a car rental agency, Lotus must continually focus on the best way to increase profits. To stay ahead of the technology curve is to stay profitable. When researching and analyzing the industry, it is important to not only look at fuel options. Lotus must look into types of vehicles.
There are several types of vehicles that are now on the market that run on alternative types of fuel. The most important vehicles to look at are the ones that would have economic value. Like most automobile rental agencies, Lotus has a car fleet made up of one to four year old vehicles. Lotus should only be interested in having a fleet of cars that can present an economical advantage when adding and removing vehicles from the fleet. Removing is usually done by selling or trading in the older vehicles.
Currently, trading in and selling regular fuel vehicles are all Lotus is doing. To this point, the company remains financially stable with this practice. On average, “depreciation makes up about 48 percent” (Singletary, 2008, para. 10) of the vehicle ownership costs within the time Lotus keeps a vehicle. With the current cost of fuel, and rapidly rising, there could be financial disadvantages of having regular fuel vehicles. “If gas prices hit $5 a gallon, you will have a tough time trading in the car, Consumer Reports warns.” (Singletary, 2008, para. 17)
This report will now cover four types of alternative fuel vehicles. The First one will easily be ruled out. Fuel-cell vehicles powered by hydrogen should not be considered at this time. The cost of a single vehicle could be in the price range of 500,000 to one million dollars.
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