China Auto Rental has announced that USA-based Hertz has agreed to invest in its operations as it continues to build on its position as domestic market leader in short and long-term car rentals.
Hertz will acquire a stake of approximately 20 per cent, on a fully diluted basis, in CAR and hold a seat on the 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 fulfils 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 travellers unparalleled short and long term rental services.
“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 Frissora, chairman, Hertz Corporation.
Under the agreement, which is subject to normal closing conditions, CAR will be granted a license for an initial five 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 as 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.