Analysts from MKM Partners, a Wall Street trading and research firm that covers the car rental sector, met on November 20 with Dollar Thrifty Group’s CEO Scott Thompson and CFO Clifford Buster in Tulsa, Okla.
These types of meetings are standard and are geared to provide greater information for the investor, though the notes provide insight into the auto rental company’s view of its own affairs in relation to the current state of the industry. Here are a few of the key takeaways:
- Vehicle supply continues to be tight versus demand and pricing is robust, particularly as the company heads into peak holiday periods.
- DTAG management believes that the benefits from industry consolidation as well as the change in the relationship with the auto OEMs are still largely to be felt.
- DTAG fleet costs are normalizing ($350 per car per month) but there is some scope for improvement in 2010. The restructured relationship with Chrysler (eliminated 75 percent purchase requirement) and a change in vehicle mix, including a move to 90 percent risk vehicles, provide the company more flexibility in managing its fleet costs.