Lotus Report Rough Draft

1391 words - 6 pages

IntroductionWith fuel costs rising, Alternate Fuel Vehicles (AFV) are becoming more and more attractive to the consumer. After investigation, it is the opinion of Team B that Lotus Car Rental Corporation should invest in the purchase of a small fleet of these cars in a test marketing effort. This paper discusses the physical advantages and disadvantages of AFV as well as the cost and possible return on investment for Lotus Car Rental Corp.BackgroundA wide variety of alternate fuels-fuels excluding gasoline and diesel-for powering vehicles, exist. Some vehicles can be special ordered from the manufacturer, already adapted to accommodate these alternate fuels. In the case of hybrid cars, no special order is needed as models have been on the market since 1999 and are increasing in popularity.In the non-commercial arena, hybrid vehicles and 100% electric fuel vehicles are more widely used than other alternate fuel vehicles at this time. Commercially, Compressed Natural Gas (CNG) has become very popular especially in the public transportation industry. According to the "Transit Resource Guide" a publication of the American Public Transportation Association, "As of January 2001, approximately 25% or all new buses on order in the U.S. are natural gas-powered" (apta.com, 2003). Many of those municipalities ordering them are striving for a 100% conversion. Compressed natural gas, propane, methanol, and ethanol are growing in popularity as fuel sources, as more vehicles are being made that can burn them.More stringent clean air laws, higher gasoline and diesel prices, and a more environmentally minded public are all contributing to the growth of the alternate fuel vehicle industry. The industry has struggled for a while in a catch-22 type situation. An alternate fuel "fueling infrastructure" has developed at a snail's pace as it has waited for the automobile industry to build more vehicles to use it, and the auto industry has been waiting on the development of the fueling infrastructure before it moves ahead with the manufacture of AFV. As the infrastructure for the distribution of these fuels increases, the number and popularity of the vehicles that use them are likewise increasing.The Advantages and Disadvantages of Investing in AFVAdvantages:The advantages of investing an Alternate Fuel Vehicle fleet are many.1.)Gasoline prices on the west coast are over $2.10 per gallon for regular with diesel not far behind. (usa. Prices on the east coast are catching up fast.2.)People gain some peace of mind knowing that they are not only saving money, but also helping the environment.3.)Tax credits and deductions currently available for the purchase of such vehicles can be as high as $4000 per vehicle.4.)Maintenance costs on such vehicles drops due to either the decreased consumption of gasoline or the consumption of a fuel that burns much cleaner than either diesel or gasoline.5.)Lotus Car Rental gains the image of an environmentally caring company as well as a...

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