Hertz Global Holdings has reached an agreement to substantially reduce its equity position in China Auto Rental (CAR Inc.), China's largest rental car company, while at the same time extending its existing commercial agreement between the two companies to 2023.

Hertz has been a commercial partner with CAR since 2013, and the extension enables the company to participate in the anticipated growth of China's car rental market, according to Hertz.

In 2015, Hertz announced that it intended to monetize its investment in CAR Inc. and use the proceeds for general corporate purposes. The company reached an agreement to sell 203,554,310 shares of CAR Inc. stock to UCAR Technology Inc. on March 13, 2016, with expected proceeds of approximately $240 million, according to the company.

This transaction, together with two other share sales in 2015, reduces Hertz Global's ownership in CAR Inc. to approximately 1.7% of CAR Inc.'s total shares, says the company.

"Through our relationship with CAR Inc., Hertz has extensive reach and brand presence in the rapidly growing Chinese market, and our customers will continue to have a broad access to car rental and ride services there," said John Tague, president and CEO of Hertz Global Holdings. "Extending our agreement through 2023 enables us to work with CAR to further leverage our global network to grow rental and car hire business into and out of China with business and leisure travelers."

With the commercial agreement, CAR will have use of the Hertz brand while Hertz customers will have access to car rental and chauffeur services through CAR's locations in more than 700 locations across China, according to Hertz. CAR also has an agreement with UCAR, a leading ride-sharing company in China.