Hertz Takes a Stake in China Auto Rental

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.”