Hertz Corp., the world’s largest car rental company, is expanding beyond US airports and adding outlets in cities and suburbs across the country, to appeal to more weekend travellers, business clients and consumers with cars in repair shops.
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According to a Reuters report, Park Ridge, New Jersey-based Hertz, a unit of Ford Motor Co., plans to grow from a current total of 1,100 non-airport sites to 1,300 by the end of this year – it has already opened 130 since January, in a bid to put more customers into the Hertz rental car driver’s seat.
“We enjoy approximately a 30% market share at the airport today and we don’t see any reason why we can’t reach that share in the off-airport segment,” Hertz spokeswoman Paula Stifter told the news agency.
Reuters said Hertz’s push into the more than $US7 billion US off-airport car rental market also includes securing more insurance replacement business, which primarily targets people whose vehicles are in the repair shop.
In this segment, Hertz faces tough competition from low-cost rival Enterprise Rent-A-Car, which has about 500,000 vehicles in its fleet and 5,000 locations across the United States, the report said, citing Abrams Travel Data, a Long Beach, California-based travel market research firm.
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By GlobalDataBut there is room for Hertz and other competitors to grow, Jon LeSage, vice president and director of research at Abrams, told Reuters.
“The local and insurance replacement market is far from being saturated,” LeSage reportedly said. “Right now, Enterprise is there to capture most of this business, but it isn’t necessarily going to be that way forever.”
Hertz has also priced its in-city and suburban location rentals “modestly lower” than at airports, Stifter told Reuters.
The report said Hertz’s expansion comes at a time when Ford is pulling back from low-margin fleet sales that push up volume but generate little or no profit.
Ford has said it will continue to make its Ford Taurus car available for fleet sales, however, and Stifter told Reuters the change in strategy at its parent had not affected Hertz.
“We are obviously buying more vehicles from other manufacturers,” she reportedly said, adding: “We don’t have concerns about our fleet size or our ability to meet customer demand.”
According to Reuters, Stifter declined to reveal the size of Hertz’s US fleet or the percentage of vehicles it gets from Ford but Abrams told the news agency Hertz has about 70,000 vehicles in its off-airport fleet.
Worldwide, Hertz operates 7,200 locations with a fleet of nearly 500,000 vehicles, the report noted.
Michael Gallo, research analyst at CL King and Associates, told Reuters the car rental sector, which was badly hit following the September 11, 2001, attacks, is recovering.
The news agency said Hertz reported a pre-tax loss of $US7 million in the first quarter, compared with a $59 million loss during the same period a year earlier and said an improvement in demand was offset by lower pricing in the sector.
Hertz, which is also a large renter of industrial and construction equipment, will be able to capitalise on its brand name, Gallo told Reuters, adding: “Hertz is the best recognised name out there.”
