Hertz Global Holdings Inc., the car- and equipment-rental company that’s splitting in two, tumbled the most in seven months after saying it needs to fix three years of accounting and that quarterly results won’t meet consensus estimates on weak car-rental revenue.
The Chinese will buy 16.7 million passenger cars and light commercial vehicles this year, about five million more than consumers in the U.S., according to the most recent research by J.D. Power and Associates. Driven by China’s rising middle class, breakneck development of suburbs and roads, and drastically reduced tariffs on automobile imports since 2001, a torrent of cars is choking Chinese cities in traffic and pollution. Convinced that a market existed for car rentals, Shanghai-born Ray Zhang, the founder and former chief executive officer of logistics software maker Aleph in Emeryville, Calif., returned to China in 2005 and launched eHi Car Rental a year later with $5 million in venture capital, promoting renting as a greener alternative to owning.