U.S. President Donald Trump's plan to impose a 25% tariff on imported vehicles is anticipated to significantly impact the automotive market. Industry analysts suggest these tariffs will likely increase the cost of new vehicles, potentially shifting consumer demand towards the used car market.
This shift is expected to bolster the value of used cars, which could serve as a tailwind for rental car companies like Hertz. As one of the world's largest used car dealers, Hertz stands to benefit from strengthening residual values, enhancing its 'Sell Right' strategy to maximize proceeds from vehicle dispositions.
The potential for higher used car prices could improve Hertz's fleet economics, a critical component of its 'Back-to-Basics Roadmap' focused on disciplined fleet management. This macroeconomic development could support the company's efforts to return to sustainable profitability.
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