Rental car firms have begun cancelling new vehicle orders from manufacturers across the US as the coronavirus continues to heavily impact their business operations. Bloomberg reported earlier this week that Hertz Global (NYSE: HTZ), Avis Budget Car (NASDAQ: CAR), and Enterprise Holdings have all either reduced or outright cancelled new orders from vehicle manufacturers.
Automakers have been working with the rental car firms, whom make up to 80% of their overall fleet sales, to redirect or cancel these orders, with some shipments being redirected to their own packed parking lots. General Motors in particular is taking back some of the vehicles it agreed to sell to the car rental firms, while Hyundai and Fiat Chrysler have both said they’ve helped redirect new vehicles to other customers.
The impact is expected to be felt long term as well. All of Hertz, Avis, and Enterprise have called off new vehicle orders for May, June and July with General Motors. Hertz itself has actually cancelled all new vehicle orders for the year as it deals with its creditors to keep the lights on at its operation.
While new vehicle sales continue to be halted for rental agencies, these agencies are also dealing with a larger problem – where to store all current inventory. ZeroHedge reported this morning that numerous stadiums across America are now seeing their parking lots filled to the brim with that of rental vehicles as airport parking lots have met their capacity.
Information for this briefing was found via Bloomberg and ZeroHedge. The author has no securities or affiliations with any of the mentioned securities. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
