07.09.2008

Hertz moves into China

Hertz Equipment Rental is moving into China and has opened its first location in Shanghai. Its initial product line includes aerial lifts, air compressors and generators, but the company says that it plans to add cranes, excavators, rollers and wheel loaders in the future.

Gerry Plescia, president of Hertz Equipment said: “We are constantly seeking out revenue and growth opportunities in the equipment rental market. Operating in China is critical to Hertz’s overall strategy as it enables us to continue our geographical expansion while tapping into our diverse product line to service many of the growing industries in China, including the manufacturing, shipbuilding, industrial and construction markets.”

Mark Frissora, chairman and chief executive of parent - Hertz Corp, said: “Hertz Rental has a strong growth agenda with a focus on geographical expansion. The equipment rental market in China is in its infancy and with an established presence there, we will be able to capitalise upon the growth of the Chinese marketplace over the coming years.”

Vertikal Comment

Hertz has an unusual approach to expansion overseas, it has been present in Europe for many years having originally opened in the UK and then France and Spain, with franchises in Austria and Norway. It closed the UK after a year or two, having selected the wrong partners and has never reopened, it did maintain its French and Spanish operations expanding them slowly over the years.

It seems strange then when it has done precious little with its European business over the years that it should suddenly open a single location in China, a tough market for outsiders to do business in, particularly in the service sector.

It will be very interesting to see how the venture develops, unlike other developing markets, Hertz will not be able to ship used equipment in from its other operations in order to balance its fleet. It will also be vulnerable to local competitors who better understand what is a tricky market.