Although Hertz is already one of the biggest names in the car rental industry, it’s always looking for ways to stay on top. That is why the company has announced plans for a brand new fleet purchasing strategy for the United States. The idea is to keep the Hertz name competitive in the U.S. market.
However, Hertz doesn’t plan to stop there. The company also announced that it’s implementing a new global cost-reduction program. This new cost-saving scheme will hopefully save the car rental giant nearly $100 million a year on average costs.
The non-executive, independent chairman of the board for Hertz, Linda Fayne Levinson, said that the board believes these announcements will help strengthen the company overall. The goal of these announcements is to not only help Hertz continue to grow, but also to help strengthen its financial performance and customer satisfaction. The Hertz team is on board to help the company achieve these top priorities.
The CEO of Hertz, Brain MacDonald, said that these announcements are already underway. That is because they are a very important part of what Hertz wants to achieve. They will help improve the company’s financial performance and overall operating performance. Hertz needs to be able to focus on its biggest opportunities. Although the company is moving forward very quickly, it will still be some time before the full benefits of this new strategy are seen on paper.
MacDonald also said that the Hertz Board, as well as its management team, has already determined that this new plan is a very necessary part of helping Hertz establish a more competitive product in the United States. It will help the company gain greater flexibility and protection against the ever-fluctuating prices of the used vehicle market.
According to the company, it’s planning to purchase around 350,000 cars. All of these vehicles will be 2015 models. Around 25 percent of them will be delivered to the company in the fourth quarter of this year. As the cars start coming in, the “risk” vehicles that Hertz has in its fleet in 2015 will be significantly lower than in 2013 and 2014.
The financing for purchasing these new vehicles will be funded by Hertz’s revolving credit facilities. This revolving credit was just recently amended to extend the maturities and to help provide incremental growth capital.
For consumers, this means there will be a lot more newer cars to choose from when renting with Hertz in the United States in 2015. Many of the old fleet vehicles will be sold as used cars. This will help circulate some of these vehicles back into the market.