Lotus Rental Car

Abstract

Creating a fleet of Alternative fuel vehicles for Lotus rental cars would be a very wise decision. There is a strong movement towards using alternative fuels for many reasons. The consumers are now motivated to drive vehicles that not only protect the environment, but also save money. More and more car manufactures are providing vehicles that use alternative fuels or “Flex” fuels. This movement in the market place is gaining momentum. It would be wise for Lotus to lead this market by providing this service to the consumer.

Feasibility of an alternative fuel vehicle fleet.

Today’s environmentally concerned consumers are looking for ways to not only save the environment, but also save money. Oil prices are constantly on the rise and turmoil in the oil producing regions has not helped alleviate the problem. Taking these considerations and research into account, we feel that Louts Rental Cars should invest in an alternative fuel vehicle fleet.

Background

Alternative fuels are derived from resources other than petroleum. Some Alternative fuels are produced domestically, reducing our dependence on imported oil, and some are derived from renewable sources. Often, they produce less pollution than gasoline or diesel (fueleconomy, 2007). Currently there are a wide variety of alternative fuel vehicles, or AFV’s, on the market. These alternative fuel vehicles use a variety of different alternative fuels. The more common types of fuels used are ethanol, biodiesel and natural gas. These fuels have been around for many years, but their widespread use has only been in the last decade. Ethanol fuel is from corn, grasses, and other crops. Biodiesel is a form of diesel fuel that is produced from vegetable oils. This type of fuel not only produces fewer pollutants than normal diesel fuel, but also be reused and filtered. Natural gas is used in two forms to fuel vehicles: compressed (CNG) or liquefied (LNG). CNG is the type used for passenger vehicles, which can run on CNG alone, or have a bi-fueling system that uses both CNG and gasoline (greenerchoices, 2006).

While there are various alternative fuels, access to alternative fuels should be a consideration. These vehicles are becoming very popular with consumers because of the lower cost and better mileage, creating market pressure to build more alternative fuel stations. The environmental conscious public is looking for a more “green” way to travel, and, fortunately, there are many different types of alternative fuel vehicles available on the market today. Cleaner vehicles using battery electric, hybrid electrical and alternative fuels are often supported by government incentives to encourage adoption of new technologies that are beneficial to society (California Air Resources Board, 2007). Many of the leading car manufactures’ are offering models that can be ordered to use alternative fuels. In fact, most car manufacturers offer vehicles that can be converted to an alternative fuel system. While there may be cost increase involved in these upgrades. The long term cost of fueling these vehicles and Government incentives help to bring the ownership cost down. Furthermore, there is a very powerful shift of social values in today’s society. Many cultures around the world are working to save and preserve the environment. The idea of “saving the environment” is not only good ethics, but it could be very good business. Since 1998, patrons of EV Rental Cars have saved around fifty thousand dollars via renting alternative fuel vehicles from the corporation, and EV rentals has saved around fifty thousand gallons of gasoline through the use of alternative fuel vehicles (anonymous, 2000). “Very good business” is perhaps an understatement.

Key Problems

As we all know, the world is not perfect. There can be drawbacks in many aspects of life, especially business. The addition of alternative fuel vehicles to Lotus Rental Cars’ fleet is no different. Below we have listed some of the problems that could be encountered with alternative fuel vehicles. All information is based on a review of the background and research conducted for this case study analysis.

1. AFV’s require specialized repair shops and technicians for any malfunctions.

2. Some AFV’s produce less horsepower than conventional gasoline-powered vehicles and cannot operate as long or as far as conventional gasoline-powered vehicles due to rechargeable batteries..

3. AFV’s can be more expensive than conventional gasoline-powered vehicles.

Alternatives

Problem 1

Some AFV’s are similar to non-AFV’s, but all require special attention when it comes to repairs. Flex fuel vehicles, or FFV’s, are similar to conventional gasoline automobiles, but still require qualified mechanics and technicians to work on them (Gable & Gable, 2007a). FFV’s tend to follow the same maintenance schedule as non-FFV’s, but FFV’s require E85 compatible replacement parts when dealing with any engine management and fuel system components (2007a). Hybrid repair is more complicated than most of AFV’s because of its many advanced components. Any malfunction in one component of a hybrid can seriously affect the others (Gable & Gable, 2007b). Due to the way that hybrids are manufactured, “serious troubleshooting, diagnosis, and repair” of these vehicles is best left to qualified technicians to avoid injury and further compromising the vehicles (2007b). Natural gas and propane vehicles are also very similar to gasoline-powered vehicles (Gable & Gable, 2007c). A considerable difference concerning maintenance between conventional vehicles and these AFV’s is the “fuel storage and delivery system”(2007c). Another key difference is that natural gas and propane vehicles’ maintenance schedules usually deviate from conventional maintenance schedules (2007c). Understanding how a vehicle operates can make a significant difference in being knowledgeable of how to maintain it.

A plausible business solution to this problem would be that Lotus Rental Cars purchases new AFV’s from reliable dealers only. This would ensure that vehicle service contracts are valid and the most qualified mechanics maintain Lotus Rental Cars’