Auto Rental News

NOV-DEC 2012

Magazine for the professional car and truck rental industry.

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Page 25 of 35

GR EEN F L EE T cars to 65 today. "We sell primarily the service," Her- nandez says. "Because we are a small company, [customers] don't have to deal with some regional manager or corporate guy. If you have any problem, call my cell phone and I'll take care of it." MPG has aligned itself with Heal the Bay and The Surfrider Foundation, and also accompanies a local dealer group's "Green Team" to local events. But in gen- eral, the company's marketing is minimal, depending mostly on positive word of mouth. (Read about some of its daily deal promotion strategies on page 16). Hernandez says the company's retail clients are interested in supporting the green movement and reducing their carbon footprint, though he admits that another large source of renters — from body and repair shops — "just want a cheap ride and a good experience." For those renters, the environmental angle is an added value. "Besides getting great service, they are getting into newer vehicles that are green cars," he says. "It makes you look good as a company." DOLLARS AND SENSE MPG is owned and was started by Steve Vahidi, who also owns California Rent-A- Bio-Beetle's Nissan Leaf gets charged by a DC Fast Charger at the Kalana O Maui Building in Wailuku, Hawaii. A fi rst for Maui, DC Fast Chargers will charge a Nissan Leaf battery from depleted to 80% capacity in about 30 minutes. The Fast Charger is free to users. Car. Though there are benefi ts to being the offshoot of a parent company as op- posed to a new start up, in this case, trad- ing fl eet isn't one of them. "When we're sold out, we can't borrow a car that isn't 'green,'" Hernandez says. It's also not possible to fl eet up on ECOLOGIC TRANSPORTATION ENTERS INTO LETTER OF INTENT TO ACQUIRE ACE RENT A CAR PARTNERSHIP WILL FORM A "PURE GREEN" RENTAL COMPANY. O n Aug, 2, Ecologic Transportation Inc. (EGCT) entered into a Letter of Intent to acquire 100% of the issued and outstanding shares of Ace Rent A Car Inc., according to an Aug. 13 press release. Financial terms were not disclosed. EGCT's agreement with Ace is to purchase all aspects of the business, its wholly-owned locations, its affi liate market- ing system and its reservation system. EGCT states that it intends to acquire multi-regional inde- pendent car rental companies, consolidate their operations and brands, introduce economy-of- scale effi ciencies into its sales and operations, and expand market share as the only "pure green" multi-geographic car rental company in the world. Ace owns 12 corporate loca- 24 November/December 2012 tions, while its affi liate network comprises more than 200 locations with 89 of them in U.S. markets. Ace generated gross revenue of $69 million for the year ending March 31, 2012. As the company adds acquisi- tions, EGCT will use Ace staff and its customer service model to train and oversee the transition, according to the press release. The management team of Richard (Dick) Radzis, president, Charles Mullin Sr., VP operations and fl eet, and Julie Ray, chief fi nancial offi cer will remain with the company, according to the announcement. "I am very excited about bringing together the operations, reservation technology and the culture of Ace with the wisdom, experience and creativity of Ecologic Transportation," Radzis stated in the release. AUTO RENTAL NEWS Headquartered in Santa Monica, Calif. and founded by Edward W. Withrow, the company's chairman, EGCT is a holding company with two operations, Ecologic Car Rentals and Ecologic Products. "The Board and management of Ecologic Transportation are extremely pleased to have the opportunity to work with the cali- ber and experience level of the management and staff of ACE, and look forward to working with them to build a new and superior business model for the car rental industry," stated Withrow in the press release. William B. Nesbitt serves as EGCT's president and chief operating offi cer. Nesbitt founded Olin's Rent A Car in New York, which subsequently moved to Miami, Fla. and eventually became Alamo Rent A Car. typical rental models with great fl eet pric- ing. The Toyota Prius C, at $20,000, is the cheapest model MPG has in its fl eet. However, even with higher capitalized costs for hybrids, MPG manages to keep rental rates reasonable. Most of the fl eet rents for $40 to $60 a day, though a Chevy Volt could go for $600 a week. MPG makes up the difference with volume and utilization, which runs 85% to 90%. Ancil- lary sales items such as navigation, baby seats and Wi-Fi help too. For the renter, as fuel prices creep higher, the numbers add up favorably. "People realize that driving a Prius to Vegas for the weekend will save a lot of money," Hernandez says, adding that a renter can get a third-generation Prius for $50 a day and spend $30 on fuel. MPG has a mileage cap of 150 miles a day. But high fuel prices have been a double-edged sword. MPG remarkets its vehicles at 30,000-40,000 miles and gets a good return at auction, especially when gas prices are high. However, when pump prices are high, dealers aren't dealing on new hybrids, Hernandez says. The company is considering buying pure-electric models such as the Nissan Leaf, but Hernandez is worried about having to deal with the customer service issue of a stranded renter with a depleted battery. Renting a natural-gas powered Honda Civic GX could be an option, but the lack of public fueling stations negates that option, Hernandez says. "We're learn- ing as we go."

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