Hertz, Dollar and Thrifty in the same Bed. How Many Brands can Hertz Support?

It looks like Hertz will be buying Dollar Thrifty. This presents a number of challenges related to which brands they keep, and whether the jettison any. The market leader Hertz in now in 146 countries with 8,200 locations, and this is what is attractive to Dollar Thrifty. Access to better systems and more locations. So from an operational standpoint, there are valuable synergies.

But from a branding standpoint, it is a little more dicey. One the surface, the multi-brand portfolio could offer consumers multiple price-points to provide different levels of value. Some Hertz members might want to trade down, and Thrifty and Dollar customers might like to trade up, albeit this will probably not be as likely. And because there will be less competition, we can expect prices to go up. But I suspect that, in time, the lines will blur between these tiers of value. And because the costs of marketing three big brands is significant, in the not too distant future, Hertz will most likely phase out one of the acquired brands. What they don’t need is expensive complexity in a tight margin marketplace.

Enterprise, National and Alamo are now one rental cluster, and they are facing the same issues. While today they justify the three tier pricing as a solution to their brand array, it may not be the most optimal financial structure into the future. It would be much easier to migrate to a two-brand structure. This doesn’t help consumers.

So here is my question: Is there significant brand equity and differentiation in Dollar and Thrifty for Hertz to support both brands over the long term?