SIX RENT A CAR

Welcome everyone to this presentation about Sixt Rent a Car, one of the world's
leading car rental companies. In the next few minutes, we will explore Sixt's history,
innovative services and global impact on the tourist transportation industry in Europe
with a special focus on Spain.

Since its founding in 1912 in Munich, Germany, by Martin Sixt, the company has
experienced impressive growth, becoming a reference of excellence and service in the
car rental market.

Today, Sixt operates in more than 110 countries, with a diversified fleet ranging from
compact vehicles to luxury cars and commercial trucks. This extensive global
presence and constant pursuit of innovation have positioned Sixt as a preferred choice
for both business travelers and tourists around the world.

We are going to mention the main aspects that we are going to refer to throughout the
presentation. We will start with a macroeconomic contextualization of Spain and
Europe and we will explain the main magnitudes that affect the company, the situation
of the tourist demand in Spain and we will also analyze in this context the national and
European transport infrastructure. We will continue talking about the company Sixt,
its origin and description of the model applied and the strategies it follows both
nationally and internationally as well as the competition in the sector and the type of
competitive model in which it operates. In addition, we will talk about the policies that
affect both nationally and internationally the company and its involvement in
sustainability and environment. Finally, we will end with a conclusion about the firm.

MAIN MACRO-MAGNITUDES AFFECTING CAR RENTAL COMPANIES IN

SPAIN

The main macro magnitudes in Spain that affect car rental companies (rent a car)
include:

● Economic growth: economic growth in Spain and Europe directly affects car
rental demand. When the economy is booming, there is more business travel,
tourism and commercial activities, which increases the demand for car rental
services.
● Unemployment: The level of unemployment influences people's ability to pay
for car rental services. High unemployment can reduce demand for car rental,
as people have less disposable income to spend on travel and transportation.
● Tourism: Spain is one of the main tourist destinations in the world. The
number of tourists visiting the country directly affects the demand for car
rentals. High tourist seasons can increase the demand for car rental, while low
seasons can reduce it. In addition, the method of transportation of tourists has
changed a lot. Tourists come less and less by car and more and more by plane,
which increases the potential number of car rental customers. In the following
graph, extracted from the INE database, we can see how the vast majority of
tourists coming to Spain do so by plane. Another thing we can point out that is
significant is the seasonality of tourism in Spain. We can clearly see how the
flow of tourists entering the country varies according to the season of the year,
with the summer months being the highest season and the winter months the
low season.

● Tax and Regulatory Policy: Changes in tax policy, such as excise taxes or
vehicle taxes, may affect car rental companies' operating costs, which in turn
may influence the prices they charge customers. Fuel taxes can also reduce the
demand for car rentals by increasing the cost to tourists and making this option
less attractive.
● Infrastructure and Public Transportation: The quality of infrastructure and
public transportation can influence the demand for car rental. For example,
cities with efficient public transport systems can reduce the need to rent a car,
while areas with poor infrastructure can increase the demand for car rental
services. Overall, the transport infrastructure in Spain and Europe in general is
modern, well-developed and plays a crucial role in the country's connectivity
 nationally and internationally. However, as in any country, there are challenges
and areas for improvement, such as traffic congestion in some cities, the need
to maintain and modernizing existing infrastructure, and promoting more
sustainable and, above all, more efficient modes of transport. Spain is a
country with a unique geographical diversity, including beaches, mountains,
picturesque villages... And the good and extensive road network, with the vast
majority of them well maintained and signposted, encourages tourists to rent a
car and be able to visit the place with greater comfort and flexibility. A very
practical example of this is Mallorca, since here public transport is very limited
and the type of sun and beach tourism requires that freedom of movement that
only a car can give you, since outside the city of Palma public transport is
scarce or infrequent.
● Exchange Rate: The exchange rate can affect car rental companies, especially
if a large part of their business involves international transactions or if they
rely on vehicle imports.

ABOUT SIXT

Sixt is a German car rental company based in Pullach im Isartal, a municipality on the
outskirts of Munich. It is one of the oldest car rental companies. It was founded in
1912 by Martin Sixt and at the time was the first European car rental company. Today,
it is still a family business and is currently run by the fourth Sixt generation, the
children of Mr. Erich Sixt and his wife Regine Sixt. Mr. Erich Sixt took over the
company in 1969 when the company already had almost 200 cars (today it has more
than 240,000 cars, most of them German-made). From that date until today, Erich Sixt
has managed to place the company in a more than enviable position, taking into
account that its genuine beginning was cemented with only 3 cars and as a
chauffeur-driven rental company, after the Second World War. In Spain, Sixt's head
office is located here, at Palma de Mallorca airport.

Sixt has become a blue chip (a blue chip security or blue chip company is a company
whose stock market value is stable and has a high level of liquidity. This type of
investment represents a star stock in the market and therefore has low financial risk,
low volatility and no need for large capital increases) very desirable in the competitive
world of car rental, an independent company that all the big players in the sector want.

It is a company that obtains a large part of its profits through the return they receive
from the rental of high-end vehicles. It is a philosophy rooted in the pure origins of the
company, which began its commercial activity with a handful of Mercedes-Benz. This
family-owned company saw how profits would be higher by working primarily in the
premium vehicle rental market. This yielded higher profits per unit rented relative to
any of the competing car rental companies. The company's next expansionary step
was through an international franchising model that began in Europe and has now
achieved a presence in more than 115 countries and over 600 European cities with
more than 2,200 branches.
RANGE OF SERVICES

The Group's product portfolio includes SIXT rent (car rental), SIXT truck
(commercial vehicle rental), SIXT share (car sharing), SIXT + (car subscriptions) and
SIXT ride (transfer services).

● SIXT rent: groups together the activities in the field of traditional car rental,
which remains the core of the business model.
● SIXT truck: in addition to car rental, since 2021 Sixt has been offering a wide
selection of commercial vehicles under the SIXT truck product, also known as
Vans & Trucks. These products range from vans to trucks with a maximum
weight of up to twelve tons. They cover short-, medium- and long-term needs.
● SIXT share: with SIXT share the company offers a flexible car sharing
service, which allows the vehicle to be returned even outside defined business
regions. This means that the vehicle can be returned at any Sixt station. By
pooling the vehicle fleets of SIXT rent and SIXT share, the company takes
advantage of synergies within the Group, as the vehicles can be deployed
flexibly as required.
● SIXT +: is the solution launched by the Group in 2020 for customers who do
not want to be tied for years to buying or leasing. Unlike car sharing or
short-term rentals, customers receive their own car with SIXT+, which they
can use as a private vehicle for as long as they wish at fixed monthly rates.
● SIXT ride: chauffeur-driven services. It offers corporate customers the
advantage of a simple and uniform billing system so that driving services can
be included in the planning and booking of business travelers and billed
transparently. In this way, cabs can be booked directly while the trip is being
planned via interfaces with the company's travel portals.

As we can see, Sixt is a company that offers a wide range of services, but as we have
said, its main activity is still the traditional car rental (vacation) and that is why we
will focus exclusively on it.

BUSINESS STRATEGY AND DIFFERENTIATION FROM THE

COMPETITION

Sixt rent a car is known for uniting traditional values with the modern management of
an international company, which has resulted in reliable and high quality services. Its
business strategy focuses on innovation, service quality and global expansion.

● Innovation in the car rental industry: Sixt has been known for its innovative
approach in the car rental industry. A great example of this was its major
launch of the SIXT ONE App in 2019, which marked the launch of the world's
first comprehensive mobility App with which Sixt managed to offer its entire
range of services in a single app (hence the name ONE) and made Sixt rent,
Sixt ride, Sixt share and a VTC and cab partner services available to its more
 than 20 million customers in the same app. Thanks to innovations like this, or
the launch of an autonomous cab driving service in Germany, the company
received the Corporate Innovation Award in 2021 and is undoubtedly the
innovation leader in the sector.
● Quality of customer service: the company focuses on providing excellent
customer service, both in terms of vehicle quality and customer service
throughout the rental process. Sixt is not a company that tries to differentiate
itself through prices, that is, it does not try to differentiate itself from other
companies through lower prices. Proof of this is the following table, which
shows the price per day for the same or similar car rental in each of the major
companies in the sector.

COMPANY VEHICLE MODEL PRICE PER DAY

Sixt Opel Corsa 49,25€

Avis Renault Clio 47,33€

Europcar Opel Corsa 35,36€

Goldcar Opel Corsa 25,68€

Record rent a car Opel Corsa 22,78€

Hertz Peugeot 208 35,25€

Centauro Ford Fiesta 45,05€

Enterprise rent a car Seat Ibiza 41,64€

OK Mobility Peugeot 208 18,50€

For the elaboration of the table we have searched in each of the car rental
companies with the same conditions and these have been the results. As we can
see, Sixt in this case is the most expensive company of all, so it is clear that it
does not try to differentiate itself via prices.So Sixt tries to differentiate itself
from the rest in another way. As we have already said, it is a premium car
rental company, so it focuses more on renting higher-end cars. Proof of this is
its fleet of cars, mostly composed of cars from German brands (like the
company) such as Audi, BMW, Mini, Mercedes... A fleet very different from
the rest of the competitors, which includes sports cars, SUVs and luxury SUVs
aimed at customers with a greater willingness to pay for quality products.

In addition, Sixt also differentiates itself from the rest by offering more
complete coverage, and it also differentiates itself, and very much so, from the
rest of the competitors through its high investment in marketing and
advertising. The car rental sector is a sector in which the location of the
branches is crucial. They must be located in busy areas and in strategic places
 through which tourists enter the country, such as airports, ports, train stations...
and Sixt is present in all these places. To add, Sixt is not only satisfied with
having the best locations in ports and airports or big cities, but it also invests a
lot in filling these places with its advertising. A great example of this is the
airport of Mallorca, if any of you have traveled recently, you will have seen
when you arrive at the airport of Mallorca that when you get ready to leave the
airport the first office you find is that of Sixt. And not only that, but also all the
columns, doors, even ceilings are full of advertising of the company and even
the sensation that only this rent a car exists.

● Global expansion: Sixt has pursued very aggressive and risky global
expansion strategies, establishing a presence in numerous countries around the
world. In 2022 the company grew significantly in Germany (+17%), but
mainly in Europe (+35%) and the USA (+55%). Sixt is the fastest growing car
rental company in the world, and proof of the success of its expansion is that in
2022 the USA became the largest market for the company with revenues of
over €900 million.

● Diversification of the offer: as mentioned above, Sixt has increased its range
of products in order to enhance and improve the customer experience and
reach more customers.
● Focus on sustainability: Sixt has shown an interest in sustainability and has
started to include electric vehicles in its fleet in some markets as part of its
commitment to environmental responsibility. Sixt is striving to be one of the
pioneers of a sustainable future of mobility. In 2022 it increased its share of
electric vehicles in Europe by 14% and the proportion of electric vehicles in its
fleet is expected to increase to 90% by 2030.
ANALYSIS OF THE SECTOR'S COMPETITIVENESS

The car rental sector in Spain and also in Europe is highly competitive and is
influenced by several factors:

● Rivalry among competitors: the car rental market is dominated both in

Europe and in Spain by several international companies, such as Sixt, Hertz,
Avis, Enterprise... as well as by some regional or local companies, but to a
lesser extent. Competition is intense, especially in tourist areas and at major
airports. Companies compete in terms of prices, quality of service, vehicle
availability, pick-up and drop-off locations... In addition to rivalry in
aggressive advertising campaigns and loyalty programs to retain customers.
● Threat of entry by new competitors: Entry into the car rental market in
Spain and Europe can be relatively easy in terms of legal and start-up capital
requirements. However, the barriers to competing effectively are high, as
significant investment in vehicle fleet, infrastructure (network of rental
locations), technology and marketing is required to establish a competitive
presence in the sector. Established brands have advantages in terms of brand
recognition and customer relationships. While it is true that, the emergence of
peer-to-peer car rental platforms, such as Drivy or Getaround, could represent
alternative forms of market entry.
● Threat of substitute products: The threat of substitute products in the car
rental sector in Spain and Europe is significant. Ridesharing services, such as
Uber or Cabify, as well as public transportation, such as trains and buses, are
viable alternatives to car rental, especially in urban areas. In addition, growing
awareness of sustainability and the availability of alternative mobility options,
such as electric bikes or shared scooters, may also affect demand for car rental.
Nevertheless, car rental remains a popular option for commuters, especially in
areas where public transportation is limited.
● Customer bargaining power: The bargaining power of customers in the car
rental sector in Spain and Europe is significant. Customers have access to a
wide range of options and can easily compare prices and services through the
internet and comparison platforms. Car rental companies must offer
competitive prices, a satisfactory user experience and flexible policies to retain
customers and maintain their loyalty.
● Bargaining power of suppliers: The bargaining power of suppliers in the
sector is moderate. Companies depend on automobile manufacturers to
purchase and maintain their fleet of vehicles. However, because the rental
companies purchased a large number of vehicles, they have some bargaining
power to obtain discounts or favorable terms. In addition, companies can
diversify their fleets through agreements with multiple vehicle suppliers to
reduce their dependence on a single supplier.
COMPETITIVE MODEL INTO WHICH SIXT FITS BEST

Once the market analysis is done, we can try to fit our company into one of the
competitive models studied in class. Our decision before doing the work varied
between Oligopoly or Monopolistic Competition, but once the study was done we
have decided that it is undoubtedly an oligopoly and we will explain why.

● Few dominant competitors: only a few competitors dominate the market both
nationally and globally, including companies such as Sixt, Goldcar, Avis and
Europcar. Below is a table prepared from the SABI database in which we have
tried to calculate the market share of the largest car rental companies in Spain
and we clearly observe that these companies control a large part of the market
and this is one of the characteristics of an oligopoly.

NAME LOCATION OPERATING MARKET SHARE

INCOME IN
THOUSANDS OF
EUROS 2022

Europcar IB SA Madrid 315.061 9,74%

Sixt Rent a Car SL Palma 222.093 6,86%

Goldcar Spain SL Sant Joan d’Alacant 205.014 6,34%

Avis Madrid 197.099 6,09%

Record Go Alquiler Castelló de la Plana 165.419 5,11%

Proa Rent a Car SL Manacor 158.235 4,89%

Hertz de España SL Las Rozas de 146.385 4,52%

Madrid

Canary Island Car San Bartolomé 127.997 3,95%

SL

Centauro Rent a Finestrat 80.675 2,49%

Car SL

To calculate the market share of the companies, we have divided the total
revenues of the company by the total revenues of the sector. After carrying out
the study, we can see that these 9 companies have more than half of the market
share. To give you an idea, these 9 companies invoice more than the rest of the
companies that make up the sector, which are more than 3000.

If we look at the scenario of our company, Sixt, we can see that it is the second
company with the highest revenue in 2022 and with a market share of almost
7%. According to its managers, the company's goal is to achieve a market
 share of 25% in the entire European market, a very optimistic goal, but
achievable, since for example in Germany, it has almost the entire market
share.

● Significant barriers to entry: As mentioned above, the barriers to entering

the market in a competitive position are very high. This limits the entry of new
competitors and strengthens the position of existing companies, including Sixt.
● Decision interdependence: In an oligopoly, the decisions of one company
directly affect the strategies and actions of competitors. In the case of car
rental, changes in pricing, fleet expansion, marketing strategies and other
moves by a company such as sixt can influence the decisions of other
companies in the industry, and vice versa. This interdependence reflects the
nature of an oligopoly.
● Product differentiation: although the basic product, which is car rental, is
similar among all companies in the sector, there is significant differentiation in
terms of quality, variety, availability in locations and other aspects.This creates
a situation where companies compete with each other, but also have some
market power due to customer loyalty to their specific brands.

INTERNATIONAL AND NATIONAL POLICIES AFFECTING THE

COMPANY

After searching for information, we have found a number of policies that affect the
Sixt company.

Firstly, the decision taken by the European Union in 2023 in which it banned car
brands from selling gasoline and diesel vehicles from 2035 onwards. This decision has
a major impact on all companies in the car rental sector, since from that year onwards
they will no longer be able to buy gasoline or diesel cars. This law does not prohibit
the circulation of these vehicles until 2050, which means that all car rental companies
must have an all-electric fleet by 2050 if they want to continue operating in the sector.
This decision forces companies to start converting their vehicle fleets, and as we have
mentioned above, Sixt has already been increasing the percentage of electric vehicles
in its fleet for a couple of years with the aim of having a 90% electric fleet by 2030.
However, this law not only affects these companies in terms of fleet renewal, but they
will also have to adapt their parking lots and facilities with chargers for all these
electric vehicles, which will be a great cost for them. To all this we must also add that
unless circumstances change, all spare parts and repairs of electronic components of
these 100% electric cars are much more expensive and it is something that all
companies will have to face.

Another policy affecting these companies is the European Union's Sustainable Growth
Financing Action Plan, which seeks to redirect capital flows towards sustainable
investments and ensure market transparency. To achieve this goal, the Commission
called for the creation of an EU classification system for sustainable economic
activities (EU Taxonomy). This is an important legal instrument to enable and expand
sustainable investments and thus implement the European Green Pact. This regulation
obliges Sixt to disclose information on how and to what extent its activities are related
to economic activities that are to be classified as environmentally sustainable. Today,
the German company Sixt is working and trying to reduce and even avoid
environmental pollution and to some extent is trying to make a transition to a circular
economy. Although it is true that the contribution that the company can make in this
area is not very large since Sixt does not manufacture the vehicles itself, nor is it
directly related to the reuse, recyclability and usability of these, since once the
vehicles are amortized, they are resold. Finally, we are going to talk about a Spanish
policy, and although it is not a policy that directly affects the company, we believe that
in a more indirect way it may have consequences for the company. We are talking
about the Low Emission Zones that are being created by the Spanish government to
prohibit the circulation of cars without the ECO label. For example, as of January 1,
2024, the circulation of cars without the ECO label will be prohibited on all urban
public roads within the M30 in the municipality of Madrid. These types of policies,
although they do not affect Sixt directly, they do affect it indirectly and force it to
renew its fleet in these places, since otherwise the demand for cars will fall a lot
because nobody wants a car that cannot circulate.

CONCLUSION

To finish with the presentation we would like to make a brief conclusion of everything
we have talked about so far. After all the work done, we would like to say that we
have been very surprised by Sixt's business model and above all to learn about its
origins and how a small family business has ended up becoming possibly the best
premium car rental company in the world. In addition, we have learned a lot about the
sector and it has been very interesting because living on an island, we have all
complained at some point about a tourist driving on our roads with a rental car.

One thing we would like to emphasize is that both Sixt and all the companies in this
sector are going to face great challenges in the coming years due to the technological
advance towards electric vehicles, and it will be a great effort especially for all those
small companies that have fewer resources than large firms like Sixt. We believe that
it may lead to an increase in the market power of these large companies and although
today it is a very profitable sector, its future is uncertain and will depend on where
tourism and the economy evolves. Thank you for listening.