The Hertz Story Isn’t What You Think

Re:The Hertz Story Isn’t What You Think by bonestamp2 on Monday June 01, 2020 @01:43PM (#23381322)

Another downline impact of this, from an economic standpoint, is automaker sales. Depending on the automaker, fleet sales (much of which are to rental car agencies) can exceed 50% of total vehicle sales. So, if rental agencies aren't buying new cars this year, that will have a massive impact on automakers volume.

Now, fleet sales are typically very low margin for automakers, but they still need that volume to keep the lines productive without reducing labor (another economic impact).

One bright spot is that most suppliers that I have dealt with only produce about 25% of their volume for new car manufacturing and the rest are "service parts" (repairing existing cars). So, hopefully it won't have chapter 11 impact on most suppliers as the service market should be quote healthy again soon.

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Re:The Hertz Story Isn’t What You Think by curiousllama on Monday June 01, 2020 @04:23PM (#23383320)

Fleet sales would track pretty closely to rental car use (and therefore travel), right? If so, why would bankruptcies among mostly-commoditized rental car companies impact automaker bottom lines? Avis needs to buy more cars to make up for the volume spike from Hertz' reduction, keeping aggregate sales constant relative to a no-bankruptcy scenario.

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Re:The Hertz Story Isn’t What You Think by mark-r on Monday June 01, 2020 @05:15PM (#23383929)

I think the argument is that rental business is down all over, not just at Hertz. Even if all the Hertz business goes to their competitors, the demand for new rental cars will be way down this year.

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