Word: hertz
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...still too soon to know for certain how well the Tempo and Topaz, which carry a base sticker price of $7,238, will do, but early signs are good. Hertz bought 15,200 of them for its rental fleet, the biggest single purchase it has ever made, and during the cars' first month on the market, dealers sold some 20,000 models, 50% more than the company's internal sales projections...
...Hertz Chairman Frank Olson calls the practice "stupid and destructive," but his company is doing it. National Car Rental President Bemiss Rolfs admits that the strategy is "idiotic," but his firm is going along too. Both Hertz, the No. 1 rental-car company, and National, No. 3, have been "dragged kicking and screaming," as Olson puts it, into a gigantic giveaway game started by No. 2, Avis, last September. The giants of the rental-car business are courting customers with a growing array of gifts, from toy koala bears to vacations at resort hotels. This costly contest comes...
With their new promotions, Hertz, Avis and National are reluctantly resorting to a tactic pioneered by Budget Rent a Car, the scrappy No. 4 company that has been chipping away at the dominance of the big three. Since 1978, Budget has handed out such premiums as calculators and pen-and-pencil sets. The giveaways and price discounting helped Budget boost its share of the market from about 7% in 1976 to 16% last year, close behind the 17% held by National...
Budget's challenge hit hardest at No. 2. Despite years of "trying harder," Avis saw its market share drop from 32% in 1973 to a low of about 23% last March far behind the 39% claimed by Hertz. Avis showed a record $73 million profit in 1979, but a $35 million loss for the fiscal year that ended last June...
...Hertz was the last holdout. Since October, it had a program that allowed frequent renters to build up points toward free hotel accommodations and plane trips, but the company resisted giving gifts to all comers. Says Craig Koch, a Hertz general manager: "We made an honest attempt not to get into the premium thing and to let some of our market share go for three or four months. But Avis wouldn't quit." When Avis claimed that its market share had risen six points, to 29%, Hertz jumped in, adding merchandise prizes to its travel bonuses. A customer...