1 Chapter I Introduction 1.1. Background Transportation has a crucial part in the economic and social advancement in Indonesia. The effective transportation services is a crucial for connecting areas and easing the transfer of commodities, as well as enabling the movement of people to support economic growth by supporting the demands of business and tourism. Hence, the establishment of a coherent transportation system such as road transportation, sea transportation, and air transportation might be an important purpose in strengthening the economic advancement of Indonesia. With the growing population, this is linear with the increasing mobility of people in Indonesia, especially in big cities like Jakarta. Economic growth drives the need for effective, efficient, and integrated road transportation services to increase people's productivity. Road transportation services such as car rental, ride hailing, taxi, and other public transportation are available in Jakarta to be a solution for the community to deal with the high level of congestion in Jakarta. Car Rental as one of the alternative road transportation services can be an option for people who need flexibility during their travel period. For people who require a more private and comfortable travel experience, public transportation and ride- hailing are not the optimal choices. This is particularly important for individuals who need to transport personal belongings or prefer a more relaxed travel experience without the intrusion of others. 2 600 650 690 740 800 860 2024 2025 2026 2027 2028 2029 Car Rental Revenue Projection Indonesia's car rental market is on the rebound after a dip caused by the pandemic and predict a strong growth in a tourism dan business traveler sector. Indonesia's Business Leisure is a big driver to the mobility in Indonesia, and the car rentals will follow the growth as the car rental service part of business and tourism ecosystem. The growth of business travelers in Indonesia shows a positive trend since 2023 and it is driven by the Indonesian government support through the advancements in the economic sector, infrastructure, and government policies. Indonesia’s car rentals market projected to reach a revenue of US$ 600 Million by 2024. The revenue is expected to grow annually at a rate of 7.47% from 2024 to 2029, resulting in a projected market volume of US$ 860 Million by 2029. The number of car rental users expected 16 Million users by 2029. The average revenue per user for car rental is expected to be US$ 49, its show that customers are willing to spent more for car rental services and in 2029 expected 84% from total revenue generated through online sales. Figure 1.1 Car Rental Revenue Projection Source : (Statista.com) 3 In Jakarta, road transportation plays a critical role due to the high population and as Indonesia’s economic and political center. Jakarta has a rapidly growing population, with millions of people commuting daily from surrounding area and high volumes of business acitiviy, there is a demand for transportation service and infrastructure to support mobility related to residents and the business activities that rely on effective and efficient movement within the city. Road transportation is the solution to this need, providing the primary means of commuting, transporting people, and accessing essential services in the Jakarta area. In recent years, car rental demand in Indonesian market keep growing as the mobility trend drive the changing in customer behaviour. This condition encouraged the company to consider changing their business segmentation. TRAC Astra is already well-known for providing car rentals for the corporate market segmentation. However, considering the recent trends in the car rental business, exploring and developing retail segmentation is something that can be pursued. Before entering deeper into retail segmentation, TRAC’s management needs to understand the potential issue and how retail segmentation will affect the overall business model of the company. 1.2. Company Profile TRAC Astra is a national company under PT Serasi Autoraya (SERA) and part of Astra International group that focused on providing corporate lease, personal rental, and driver services. Started operating in 1986 under PT Sinar Inti Telaga and only Jakarta with five cars focusing on corporate lease, in 1990 PT Sinar Inti Telaga 4 transformed into PT Serasi Autoraya which continues to grow as a leading company in vehicle and rental services. SERA currently operating three business lines, TRAC Astra focus on integrated trasnpportation solutions, pre-owned car sales business through mobil88, and for logistics service support through SELOG. These three business areas are integrated to specifically support mobility in Indonesia, particularly in the road transportation segment. Figure 1.2 Serasi Autoraya Company Structure Source : (SERA, 2024) Currently, TRAC has 22 branches spreads in all across Indonesia and manage more than 40.000 vehicles to serve car rental services for corporate and retail segmentation. In 2017, as the car rental market growth in Indonesia, TRAC decided to build designated team to focus on Individual Rental or Business to Customer (B2C) orders. 5 Figure 1.3 TRAC Astra Branches in Indonesia Source : (TRAC, 2024) As part of an integrated transportation solutions company, TRAC also provides car rental include driver services. TRAC has more than 4.000 professional drivers that are trained with Defensive Driving Program and service etiquettes to ensure customers convenient during the trip. Based on its activity, TRAC Astra has three core services that are featured to support customers’ transportation needs. 1.2.1. Rent Car Services TRAC Astra is a car rental company that includes various facilities and services to fulfill personal and corporate transportation needs. Customers can rent a vehicle depending on the period needed by the customer. TRAC Astra offers daily, weekly, monthly, and yearly car rental packages. The services offered also various, starting from the rental service with driver, where customers can rent a car include the driver. There is also a self-drive rental service, where customers can rent a car without a driver which enables customers to be more flexible in 6 arranging trips. Airport transfer and point-to-point services are also one of TRAC Astra's strengths. TRAC Astra fleets are always treated with routine maintenance and servicing to ensure the vehicles are always in excellent condition. Each vehicle is also covered by insurance to protect customers from various risks during the rental period. To provide convenience to customers, TRAC Astra also provides 24/7 customer service which aims to provide convenience for customers if they need assitance anytime and anywhere. All of these facilities are part of TRAC Astra's commitment to provide the best service and facilities to customers. 1.2.2. Fleet Management Solutions TRAC Fleet Management Solution helps your company manage its transportation needs with the support of AstraFMS technology from tracking and monitoring the fleet to managing the drivers and their driving behaviors. TRAC Fleet Management Solution provides convenience in managing your business fleet. With AstraFMS integrated system networks that include Vehicle Management, Driver Management, and Operation Management modules.