Rental company Hertz said Tuesday that it updates its online purchase website to allow customers to obtain funding, obtain a trade offer and do just about everything a buyer would need to buy a vehicle.
This decision is an important step for the presence of online retail of Hertz. Previously, the company’s Hertzcarsales.com website had only offered vehicle lists. Most of the purchasing process occurred in Hertz stores, including 45 in the United States.
“Our new electronic commerce platform marks a major step in the modernization of how we serve our customers with a transparent trip to ownership,” CEO Gil West said in a shared press release with CNBC. “This also marks an essential step in the execution of our strategy to make retail our main car sales channel.”
Hertz also forecasts a new SPLASHY campaign with football star Tom Brady to promote retail changes, starting on Wednesday. Brady has been a spokesperson since March.
The changes could help improve the resale values of vehicles and allow Hertz to speed up its turnover in the fleet, which is essential for rental companies. It has a fleet of around 560,000 vehicles, according to its second quarter deposit.
The company discharges about half of its fleet in a given year, according to Deutsche Bank Chris Woronka analyst. In September, around 80% of its fleet was less than a year old.
“It is important for them to maximize the price they reach on resale, because it is a fairly important part of their P&L,” said Worldka, referring to the “profit” or the business account of the company.
Rental companies transport part of their cars to wholesale auctions, which offer great liquidity, but reduce prices lower than retail, Woronka said. According to the company, less than 10% of Hertz’s fleet goes to auction. Woronka estimates that it looks more like 15% at 20% for its competitors.
Rental companies also sell vehicles directly to dealerships. But Hertz’s largest resale channel is consumers, said the company. In addition to its physical locations, the company lists vehicles on platforms such as autotrade, sells vehicles via CarvanaAnd has a Bind2buy program.
In September, Hertz said he would also sell AMAZON AUTOSwhich offers a lot of the same functions as the rental company now offers on its own website. Analysts in the automotive industry previously declared that the Hertz – Amazon partnership could reduce a historic profit source for car dealerships.
Meanwhile, Hertz is in the middle of a turnaround. The company filed for a bankruptcy in 2020 when trips all stopped during the coronavirus pandemic, drying the request for rental cars. He replaced in 2021 and the shares fell by almost 10% on the first day of negotiation.
Hertz last year introduced a recovery plan for the “Base Road Roadmap” focused on fleet management, income optimization and profitability.
The last months have been brighter. The company said its profits in the second quarter were the best in almost two years.
“These are still early sleeves in their recovery,” said Woronka. The offer of vehicles of new vehicles returned after the closures and shortages of the pandemic era, and demand is stable, he added.
“They are really looking for innovative means to bring another step towards profitability,” he said.
Watch the video to find out more about Hertz.