Hertz, the well-known rental company, is making significant strides in transforming its online shopping experience for customers. Recently, the company announced an update to its HertzCarSales.com website, allowing users to secure financing, receive trade-in offers, and navigate nearly every aspect of vehicle purchase online. This shift marks a pivotal moment for Hertz as it aims to modernize its retail operations and enhance customer convenience.
Previously, the HertzCarSales.com platform functioned primarily as a vehicle listing site, with most transactions requiring customers to visit one of Hertz’s 45 retail locations across the United States. However, with the launch of this new e-commerce platform, CEO Gil West emphasized the company’s commitment to creating a seamless journey from browsing to ownership. “Our new e-commerce platform marks a major step forward in modernizing how we serve our customers,” he stated, highlighting the company’s strategic pivot to make retail its primary channel for car sales.
This move comes at a crucial time as Hertz seeks to improve vehicle resale values and accelerate its fleet turnover. With approximately 560,000 vehicles in its fleet, the company typically offloads about half annually. According to Deutsche Bank analyst Chris Woronka, maximizing resale prices is vital to Hertz’s financial health, as it significantly impacts their profit and loss statement. Currently, around 80% of Hertz’s fleet is less than a year old, which presents an opportune moment for the company to capitalize on the high demand for nearly new vehicles.
Hertz traditionally channels a portion of its vehicles to wholesale auctions, which provide liquidity but generally yield lower prices compared to retail sales. Notably, less than 10% of Hertz’s fleet is sold at auction, contrasting with competitors who may see up to 20% of their inventory sold in this manner. To diversify its sales approach, Hertz also sells directly to dealers and lists vehicles on platforms like Autotrader and Carvana. The introduction of a partnership with Amazon Autos for selling preowned vehicles has further expanded Hertz’s reach, tapping into a market that could challenge traditional car dealerships’ profit sources.
This strategic evolution comes on the heels of a challenging period for Hertz, which filed for bankruptcy in 2020 due to the steep decline in travel caused by the COVID-19 pandemic. After relisting in 2021, the company experienced a rocky start, with shares dropping nearly 10% on their first trading day. However, under the “Back-to-Basics Roadmap” turnaround plan focused on fleet management, revenue optimization, and cost efficiency, Hertz has begun to show signs of recovery. The company’s second-quarter earnings marked its best performance in nearly two years, reflecting the stabilization of vehicle supply and demand as the market rebounds from pandemic-induced disruptions.
As Hertz continues to innovate and adapt, the involvement of sports icon Tom Brady in a promotional campaign underscores the company’s effort to capture consumer interest and drive sales. With the industry landscape shifting rapidly, Hertz’s new online capabilities not only position it for growth but also align with broader trends in consumer preferences for digital shopping experiences.
In conclusion, Hertz’s ambitious transformation of its online sales platform reflects a broader understanding of the evolving automotive market and consumer behavior. By enhancing its digital presence and streamlining the purchasing process, Hertz is not just recovering from past challenges but is also laying the groundwork for a more profitable future in vehicle sales.
