Car Rental Firm Hertz Is Latest Victim Of Auto Recalls
While an improving U.S. economy has helped rev up demand for car rentals, the rental companies have found themselves short of vehicles due to the slew of recalls by car manufacturers this year. The latest casualty was Hertz Global Holdings Inc, whose stock slumped 13 percent on Wednesday after the company withdrew its full-year financial forecast, blaming a shortage of cars due to the recalls and costs associated with an accounting error. Michael Millman of Millman Research Associates told Reuters, “… They weren’t able to get the benefit of a strengthening market because they simply didn’t have the cars.” Millman said the shortage was compounded by the fact that Hertz has a lot of contracted business that gets priority on available cars. The recalls have hurt business. And more so Hertz, than Avis, since cars made by General Motors Co account for a bigger portion of its fleet.
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