Rental Car CEO says Chrysler Cuts Blow for Sector

NAPLES, Fla., Feb 15, 2007; Reuters reported that planned fleet sale cuts by DaimlerChrysler's Chrysler unit will make finding vehicles harder for the rental car market, the No. 1 U.S. rental agency's top executive said on Thursday.

"This is one more step toward more difficulty in sourcing vehicles," Enterprise Rent-A-Car Chief Executive Andy Taylor told Reuters on the sidelines of the Business Council meeting in Naples, Florida.

Taylor added that the company has obtained enough cars for 2007, but said Enterprise will need to obtain more vehicles from other car makers, notably Asian manufacturers.

Chrysler Group CEO Tom LaSorda said this week that the struggling automaker is looking to reduce its sales of vehicles to daily rental operators by about 70,000 units in 2007.

General Motors Corp. and Ford Motor Co. recently announced cuts in less profitable fleet sales to rental car agencies.

U.S. automakers have pulled back from sales to rental agencies like Enterprise in a bid to shore up the resale value of vehicles and concentrate on higher-margin showroom sales.

Analysts argued that discounted sales to car rental agencies had allowed the U.S. car companies to avoid disruptive production cutbacks but had sapped their profitability.