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.