PARK RIDGE, N.J., April 16, 2013 /PRNewswire/ -- 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 more than 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, as well as 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 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.
"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.
About China Auto Rental
China Auto Rental Holdings Inc. (CAR) was established in September 2007, and is headquartered in Beijing. As China's largest car rental service provider, CAR is dedicated to providing customers across China with superior car rental services including short-term and long-term rentals, financial leasing, as well as assorted value-added services of roadside assistance, one-way rentals, etc. As of February 2013, CAR operated in 66 major cities, at 52 airports across China with approximately 700 service locations, serving more than 1 million customers and approximately 10,000 corporate clients.
Since establishment, CAR has received outstanding customer and social reviews nationwide. In 2008, CAR served as the official car rental service provider of the 29th Summer Olympic Games, and was awarded the 21st Century Future Star by China Entrepreneur Magazine. In 2009, CAR was listed as one of Forbes China's High Potential Enterprises. In 2010, CAR was named New Fortune's Highest Potential Business Model and China.com's Annual Best Car Rental Service Award. In 2011, CAR received the 5th Management Action Gold Award from Harvard Business Review, Best Service Award by China Brand Festival, and Best Rental Car Company by National Geographic Traveler. CAR was also voted the 2012 Deloitte Asia Pacific Technology Fast 500, and topped the Chinese Brand Power Index of the Car Rental Industry, becoming the most trustworthy brand of car rental service for customers in China. Additionally, Roland Berger Strategy Consultants named CAR the most recognized car rental brand in China, with indisputable leadership in the scale of fleet size, service coverage, market share and revenue.
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.
About Hertz Rent-a-Car China
Hertz China offers a fleet of superior cars and international standard car rental services to individuals and corporate customers from Fortune 500 and other well-known enterprises. Hertz provides a wide range of domestic rental and inbound rental services, including long-term leasing, airport transfer with concierge, chauffeur drive, self-drive, MICE car rental solutions, as well as cross-border services between Shenzhen/Guangzhou and Hong Kong. Hertz China operates today in seven cities, including Shanghai, Beijing, Tianjin, Chengdu, Shenzhen, Guangzhou, and Wulumuqi, offering a full suite of car choices including Intermediate and Full Size classes, Luxury, Prestige and SUV Collections. In addition, Hertz China has extensive partnerships with airlines, tour operators, hotels and banks.
Cautionary Note Concerning Forward-Looking Statements
Certain statements contained in this press release and in related comments by our management include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include information concerning Hertz's outlook, anticipated revenues and results of operations, as well as any other statement that does not directly relate to any historical or current fact. These forward-looking statements often include words such as "believe," "expect," "project," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts" or similar expressions. These statements are based on certain assumptions that Hertz has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors that Hertz believes are appropriate in these circumstances. We believe these judgments are reasonable, but you should understand that these statements are not guarantees of performance or results, and our actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative.
Among other items, such factors could include: our ability to integrate the car rental operations of Dollar Thrifty and realize operational efficiencies from the acquisition; the risk that expected synergies, cost savings from the Dollar Thrifty acquisition may not be fully realized or realized within the expected time frame; the operational and profitability impact of the Advantage divestiture and the divestiture of the airport locations that we agreed to undertake in order to secure regulatory approval for the Dollar Thrifty acquisition; levels of travel demand, particularly with respect to airline passenger traffic in the United States and in global markets; the impact of pending and future U.S. governmental action to address budget deficits through reductions in spending and similar austerity measures, which could materially adversely affect unemployment rates and consumer spending levels; significant changes in the competitive environment, including as a result of industry consolidation, and the effect of competition in our markets, including on our pricing policies or use of incentives; occurrences that disrupt rental activity during our peak periods; our ability to achieve cost savings and efficiencies and realize opportunities to increase productivity and profitability; an increase in our fleet costs as a result of an increase in the cost of new vehicles and/or a decrease in the price at which we dispose of used vehicles either in the used vehicle market or under repurchase or guaranteed depreciation programs our ability to accurately estimate future levels of rental activity and adjust the size and mix of our fleet accordingly; our ability to maintain sufficient liquidity and the availability to us of additional or continued sources of financing for our revenue earning equipment and to refinance our existing indebtedness; safety recalls by the manufacturers of our vehicles and equipment; a major disruption in our communication or centralized information networks; financial instability of the manufacturers of our vehicles and equipment; any impact on us from the actions of our licensees, franchisees, dealers and independent contractors; our ability to maintain profitability during adverse economic cycles and unfavorable external events (including war, terrorist acts, natural disasters and epidemic disease); shortages of fuel and increases or volatility in fuel costs; our ability to successfully integrate acquisitions and complete dispositions; our ability to maintain favorable brand recognition; costs and risks associated with litigation; risks related to our indebtedness, including our substantial amount of debt, our ability to incur substantially more debt and increases in interest rates or in our borrowing margins; our ability to meet the financial and other covenants contained in our Senior Credit Facilities, our outstanding unsecured Senior Notes and certain asset-backed and asset-based arrangements; changes in accounting principles, or their application or interpretation, and our ability to make accurate estimates and the assumptions underlying the estimates, which could have an effect on earnings; changes in the existing, or the adoption of new laws, regulations, policies or other activities of governments, agencies and similar organizations where such actions may affect our operations, the cost thereof or applicable tax rates; changes to our senior management team; the effect of tangible and intangible asset impairment charges; the impact of our derivative instruments, which can be affected by fluctuations in interest rates and commodity prices; and our exposure to fluctuations in foreign exchange rates. Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Hertz therefore cautions you against relying on these forward-looking statements. All forward-looking statements attributable to Hertz or persons acting on Hertz's behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and Hertz undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE The Hertz Corporation