Hertz right-sizes fleet, expects more used-car sales to consumers
Hertz Global Holdings has trimmed its rental fleet and expects to sell more of those vehicles, when they’re retired from service, directly to consumers at company-owned dealerships, its CEO said Tuesday.
Hertz CEO Mark Frissora said there “is a world of difference,” in the company’s current rental fleet size relative to demand compared to what it was in November.
Hertz’s U.S. average number of company-owned vehicles for the fourth quarter of 2013 increased 22 percent to 472,200, compared to the same period last year, according to documents detailing its fourth quarter and annual results.
The increase was largely the result of Hertz acquiring Dollar Thrifty Automotive Group Inc., last summer.
“We’re right-fleeted right now,” Frissora said during a conference call with analysts and reporters detailing the company’s quarterly and year-end earnings on Tuesday. “We actually have more demand than we have fleet.”
He didn’t say how big the fleet is now.
Last fall Frissora said rental demand in July and August at the company’s U.S. airport locations was “weaker than anticipated,” creating an excess of vehicles.
He said at the time Hertz would gradually reduce the size of its fleet. He made the comments to investors and analysts during a presentation at the MKM Partners Entertainment and Leisure Conference in late September.
During the conference on Tuesday, Frissora said Hertz sold 27,000 retired rental cars and trucks directly to consumers at its 65 retail used-car lots last year.
The company expects to have 125 retail used-car lots open by the end of 2014 and increase its vehicle sales to consumers by about 65 percent, he added.
Last fall, Frissora said Hertz makes $1,350 to $1,400 when it sells a vehicle at retail. In previous conference calls, he said selling vehicles directly to dealers and consumers is more profitable for the company than selling those vehicles at auction.
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