Hertz 2008 Annual Report Download - page 16

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14 Innovation…Driving Global Growth
Approximately 30% of our costs are related to the car and
equipment rental fleets. We are applying process reengineer-
ing techniques to achieve consistent fleet management goals
across the businesses: maximize cash flow, right-size fleet
levels to business conditions, reduce costs per unit, improve
utilization and optimize fleet disposition results. We made
significant progress in 2008 by:
l Simplifying the U.S. car rental fleet portfolio, reducing car
classes by 50% and by extending the holding period on
vehicles we sell from 16 months to 20.5 months, reducing
cash needs for new car purchases. We are also applying
these techniques in Europe.
l Improving fleet utilization in the U.S. and Europe despite
significant volume declines in the latter half of the year. This
was achieved by de-fleeting as rapidly as possible when
demand declined and by improving logistics to make more
cars available for rent.
l Negotiating 2009 fleet agreements to provide maximum
flexibility, with much lower purchase commitments, to add
fleet should business conditions improve.
l Introducing more alternative vehicle sales channels
including website sales in five European countries and the
U.S. Rent2Buy program, allowing customers to buy their
rental car directly from Hertz.
l Aggressively de-fleeting equipment as volume deteriorated,
and sensibly aging the HERC fleet from 30 to 36 months.
HERC’s 2009 fleet commitments and alternative fleet pro-
curement methods (e.g., leasing, rental splits) will further
reduce costs and optimize cash flow.
Fleet
Efficiency