Pordon says Penske is testing the strategy in Memphis because it is a relatively small market. If the partnership benefits both companies, similar deals could be struck in other markets, he adds.
"We're trying to gain an understating of it, see how we can operate it, see how it benefits us and Hertz," he says.
"If it proves to be a fruitful and beneficial relationship, I think there are other opportunities that we could look at in other markets around the United States because it's no secret that Hertz wants to do more of these markets."
The deal, subject to federal antitrust approvals and other closing conditions, is part of Hertz's strategy to turn select corporate markets over to franchisees, Hertz says. The deal is expected to close in the fourth quarter.
Penske owns one dealership, a Toyota-Scion store, in Memphis. Pordon says moving the retired rental cars to other markets within the group is a possibility.
Hertz CEO Mark Frissora said in a statement that Penske is a premier brand that will enhance Hertz's local and neighborhood marketing efforts. He says he expects the franchise relationship with Penske to expand into other markets.
Pordon says Hertz's Memphis market has about 2,000 vehicles representing a variety of brands in its rental fleet at any given time but that the number of retired vehicles expected to be available to Penske dealerships annually is hard to calculate. He says it depends on how often the fleet turns over and that, in turn, depends on various market conditions.
When Penske dealership customers need a loaner or rental car, Penske typically calls on Hertz or other rental companies, Pordon says. With the new partnership, Penske dealerships may have Hertz signage and a rental desk "somewhere in the property," he says.
Publicly held Penske ranks No. 2 on the Automotive News list of the top 125 dealership groups in the United States with retail sales of 154,829 new vehicles in 2011. It also sold 129,652 used vehicles in 2011.