A force to be reckoned with, Roger Penske expands his presence in the car rental business.
Hertz, the rental car giant, has entered into an alliance with Penske Automotive Group of Bloomfield Hills, which could lead to PAG picking up more Hertz franchises across the U.S.
Hertz chairman and chief executive officer Mark P. Frissora said the Penske partnership fits nicely into Hertz’s vision of being the global leader in mobility solutions. The rental giant last month announced it would purchase rival Dollar Thrifty for $2.3 billion.
With more than 25% market share, Hertz is the leading on-airport car rental brand. The company has also been serving the local market and insurance replacement industry for more than 10 years and is a recognized supplier to more than 193 of the 209 largest insurance companies.
“Hertz is pleased to enter into a partnership with Penske Automotive Group to encompass the franchising of the Memphis market,” Frissora added. “Penske is a premier brand and provides a strong platform for further enhancing the local, neighborhood market,” he said.
By partnering with Penske, Frissora said he believes Hertz will be able to accelerate its growth in key U.S. markets and further strengthen its franchising network.
“Over time, we expect to see our franchising relationship (with Penske) grow into other selected markets throughout the country,” Frissora said.
Penske’s PAG now operates 170 new car sales franchises in 17 states and Puerto Rico and 170 franchises located outside the United States,
“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,” Roger Penske, PAG chairman and chief executive officer, said Thursday.
“Hertz’s ability to harness technology and deploy the latest customer service innovations, coupled with its established customer base, will bring increased value to Penske Automotive Group’s local operations,” he added.
Terms of the agreement were not disclosed, But the outline calls for PAG, subject to the completion of closing conditions, to purchase the assets of Hertz’s existing Memphis market, providing the opportunity to operate more than 15 Hertz airport and off-airport locations around Memphis.
Hertz will provide Penske with a full array of services to help them rapidly expand their market presence while ensuring all products and services provided meet Hertz’s high-standards of customer service.
The agreement with Penske is part of Hertz’s strategy to change certain corporate markets to franchisee operations.