Hertz Takes a Stake in China Auto Rental

Business Traveler (USA) - - UPFRONT -

The Hertz Cor­po­ra­tion and China Auto Rental (CAR) have an­nounced that Hertz will ac­quire a stake of ap­prox­i­mately 20 per­cent, on a fully di­luted ba­sis, in CAR and hold a seat on CAR’s board of di­rec­tors. Un­der the agree­ment, CAR will be granted a li­cense for an ini­tial five-year term to op­er­ate on be­half of Hertz in China. Hertz and CAR will be co­branded at the lat­ter’s full ser­vice rental lo­ca­tions in China and CAR will de­velop a net­work of full-ser­vice Hertz pre­mium lo­ca­tions in key cities to com­ple­ment CAR’s ex­pand­ing lo­ca­tion foot­print.

The Hertz/CAR busi­ness will en­com­pass self-drive and chauf­feur-driven rentals, as well as short, medium and long-term ve­hi­cle rentals and leases. Hertz will con­tinue to man­age its out­bound sales team in China, and its equip­ment rental busi­ness in the coun­try is un­af­fected by this an­nounce­ment.

Ad­di­tion­ally, Hertz and CAR will be ex­clu­sive car rental part­ners for in­bound and out­bound busi­ness, of­fer­ing in­ter­na­tional cor­po­rate and leisure trav­el­ers short and long term rental ser­vices. In 2012, China’s in­ter­na­tional travel ex­pen­di­tures ex­ceeded $100 bil­lion, and its do­mes­tic rental busi­ness is ex­pected to grow more than 15 per­cent an­nu­ally through 2016.

“CAR’s 200 per­cent an­nual growth rate from 2009-2012 is six times higher than the mar­ket over the same pe­riod, and their 50 per­cent-plus an­nual fore­casted growth rate through 2016 is more than three times higher than the over­all mar­ket pro­jec­tion,”says Mark P. Fris­sora, chair­man and CEO of the Hertz Cor­po­ra­tion.“As the lead­ing global car rental brand, it’s a per­fect fit for Hertz to part­ner with the largest and most rec­og­nized car rental com­pany in China.”

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