Release time: 2013.4.16
April 16, 2013 – The Hertz Corporation (NYSE:HTZ) and China Auto Rental (CAR) announced today that Hertz, the global car rental leader, has agreed to invest in CAR, China’s domestic market leader in short and long-term car rentals. Hertz will acquire a stake of approximately 20%, on a fully diluted basis, in CAR and hold a seat on CAR’s Board of Directors. Hertz and CAR will be co-branded at the latter’s full service rental locations countrywide, and Hertz’s car rental locations and operations in China, which will provide premium rental services in key cities, will be contributed to CAR. Hertz will continue to manage its outbound sales team in China, and its equipment rental business in the country is unaffected by this announcement.
The partnership fulfills Hertz’s objective to significantly increase its presence in the rapidly expanding car rental market in China. Additionally, Hertz and CAR will be exclusive car rental partners for inbound and outbound business, offering international corporate and leisure travelers unparalleled short and long term rental services. In 2012, China’s international travel expenditures exceeded $100 billion, #1 worldwide, and its domestic rental business is expected to grow more than 15% annually through 2016.
“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. China Auto Rental has the largest domestic rental footprint, with 700 locations in 66 cities, and a 50,000-vehicle fleet which is more than four times the size of its nearest competitor. Also, CAR is growing rapidly, having doubled its revenues in 2012 to $250 million, 2.5 times larger than any other domestic company,” commented Mark P. Frissora, Chairman and Chief Executive Officer of The Hertz Corporation.
“CAR’s 200% annual growth rate from 2009-2012 is 6 times higher than the market over the same period, and their 50%+ annual forecasted growth rate through 2016 is 3 times higher than the overall market projection. As a result, Hertz is now uniquely positioned among American and European car rental brands to support the rapidly expanding Chinese rental market and CAR’s growth. Not only will CAR and Hertz be able to fulfill business and leisure rentals throughout the country, we will also provide the best rental solutions for international travelers to and from China, two markets with strong growth projections,” added Frissora.
Under the agreement, which is subject to normal closing conditions, CAR will be granted a license for an initial 5 year term to operate on behalf of Hertz in China. CAR will develop a network of full-service Hertz premium locations in key cities to complement CAR’s expanding location footprint. Taken together, the Hertz/CAR services will encompass self-drive and chauffeur-driven rentals, as well short, medium and long-term vehicle rentals and leases. Hertz will provide CAR with access to a full array of services to support their rapidly expanding market presence, services which meet Hertz’s industry-leading standards. These include access to Hertz’s operational expertise, reservation capabilities, and fleet management efficiencies.
“Hertz has extensive industry experience, advanced technology, strong brand influence and abundant customer resources. We are very pleased to enter into a comprehensive and in-depth strategic cooperation with Hertz. I believe this alliance will further intensify CAR’s shareholder strength and reinforce CAR’s leading position in China’s car rental industry. It will to a great extent enhance CAR’s scale, branding, as well as products and services, which will bring customers at home and abroad a car rental experience of high quality and convenience,” commented China Auto Rental Chairman and Chief Executive officer, Charles Lu.
Hertz operates its car rental business through the Hertz, Dollar and Thrifty brands from approximately 10,400 corporate, licensee and franchisee locations in North America, Europe, Latin America, Asia, Australia, Africa, the Middle East and New Zealand. Hertz is the largest worldwide airport general use car rental brand, operating from approximately 8,800 corporate and licensee locations in approximately 150 countries. Hertz is the number one airport car rental brand in the U.S. and at 111 major airports in Europe. Dollar and Thrifty have approximately 1,580 corporate and franchisee locations in approximately 80 countries. Hertz is an inaugural member of Travel + Leisure’s World’s Best Awards Hall of Fame and was recently named, for the thirteenth time, by the magazine’s readers as the Best Car Rental Agency. Hertz was also voted the Best Overall Car Rental Company in Zagat’s 2012/13 U.S. Car Rental Survey, earning top honors in 14 additional categories, and the Company swept the global awards for Best Rewards Program and Best Overall Benefits from FlyerTalk.com. Product and service initiatives such as Hertz Gold Plus Rewards, NeverLost®, and unique cars and SUVs offered through the Company's Adrenaline, Prestige and Green Traveler Collections, also set Hertz apart from the competition. Additionally, Hertz owns the vehicle leasing and fleet management leader Donlen Corporation and operates the Hertz On Demand car sharing business. The Company also owns a leading North American equipment rental business, Hertz Equipment Rental Corporation, which includes Hertz Entertainment Services.