Hertz

Penske Automotive Group, Inc. (NYSE:PAG), an international automotive retailer, today announced that it has acquired the assets and franchise rights to become the operator of Hertz rental car locations in certain markets throughout Indiana. The Company will now operate more than twenty on and off-airport locations, including the Ft. Wayne, South Bend, and Indianapolis on-airport locations. Hertz will provide the Company with a full array of services to help expand the market presence of the Hertz brand in Indiana while ensuring all products and services provided meet Hertz’s high-standards of customer service.

“We are thrilled with the opportunity to expand our relationship with Hertz to the Indianamarket,” said Bud Denker, President of the Penske Car Rental operations. “With our purchase of the Hertz-Memphis, Tennessee market in October, 2012, this acquisition is a logical progression in our relationship. With the lasting heritage of the Penske name in motorsports, particularly in Indianapolis, combined with the strong legacy of the Hertz brand, I am confident in our ability to bring a high level of customer service and satisfaction to these locations throughout Indiana. Our expansion will allow us to begin scaling our operations, and will help Hertz accelerate its growth in a key market.”

“Hertz’s partnership with Penske Automotive in the Memphis market has proven successful and extending our relationship to Indiana was the logical next step,” commented Mark P. Frissora, Chairman and Chief Executive Officer for The Hertz Corporation. “The Penske team is creating the most valued car rental experience in the Memphis market and we’re confident they will bring the same commitment to the Indiana car rental business. With this expanded partnership, we’re confident we’ll be able to accelerate our growth throughout the region and continue our expansion into the neighborhood market.”

[Source: PenskeAutomotive.com]

The Hertz Corp. and Penske Automotive Group Inc. announced today the signing of a franchise agreement in the Memphis, Tenn. market for Penske Automotive Group to join Hertz’s network.

This partnership is part of Hertz’s companywide initiative aimed at increasing its presence in the off-airport car rental market and is part of Hertz’s strategy to transition select corporate markets to franchisee operations, the announcement states.

“By partnering with Penske, Hertz will be able to accelerate our growth in key U.S. markets and further strengthen our franchising network,” said Mark P. Frissora, chairman and CEO for Hertz. “Over time, we expect to see our franchising relationship grow into other selected markets throughout the country.”

Upon completion of the closing conditions, Penske Automotive Group will purchase assets of Hertz’s existing Memphis market, in which Penske will operate more than 15 airport and off-airport locations. Hertz said that it will supply Penske the resources it needs to expand its market presence, while ensuring that the services and products provided to customers meet Hertz’s standards.

“We are confident that the commercial and operating synergies between Hertz’s car rental and Penske’s car dealership businesses will benefit our dealership network and Hertz’s rental operations,” said Roger Penske, chairman and CEO for Penske Automotive Group.

Analysts also expect more franchisee announcements from Hertz. “This Penske agreement, in and of itself, is not a needle-mover,” writes Fred Lowrance, senior analyst with Avondale Partners. “However, it is the first significant indicator that we are aware of that suggests HTZ (Hertz’s) franchising initiative may be picking up speed. We expect more announcements heading into year-end.”

Lowrance states that franchise opportunities will help with Hertz’s targeted margin improvements. “Evidence of progress on this front is particularly important because we view the franchising opportunity — and the reduced asset-intensity of the business model that comes with it — as one of the key drivers of continued margin improvement required for HTZ [Hertz] to achieve its impressive 2014 standalone growth and earnings targets.”

[Source: AutoRentalNews.com]