September 16, 2011

Keith Knutsson and Chrysler’s 1990 Acquisition of Dollar Rent A Car

Posted in Uncategorized at 4:15 am by Keith Knutsson

Keith Knutsson’s experience in finance spans more than two decades, including time spent with Sodipierre Finance in Paris, France, undertaking private equity investments focused on real estate. Mr. Knutsson also worked with Swan National, assisting in the creation of the EuroDollar car rental network, the largest privately held car rental company on the continent. This consulting work was informed by experience as a Vice President with Dollar Rent A Car, Inc., of Florida, assisting the firm’s founders with valuation and the negotiation of Dollar Rent A Car’s sale to the Chrysler Corporation.

Dollar Rent A Car’s acquisition by Chrysler took place a year after the auto manufacturer’s 1989 purchase of Thrifty Car Rental, a company founded in 1958 and taken public in 1987. Dollar Rent A Car’s history dated back to its establishment in Los Angeles in 1965, and was the fifth-largest car rental company in the United States at the time of its acquisition. The value proposition offered to Chrysler by Dollar Rent A Car’s acquisition was its numerous rental outlets at airports, which neither Thrifty nor Chrysler-owned Snappy Car Rental, Inc., enjoyed. The negotiated deal for Dollar Rent A Car represented a new tack for Chrysler’s Chairman Lee A. Iacocca, who had publicly stated an intention to reduce car sales to rental-car fleets six months earlier. This was due to heavy discounts negotiated with manufacturers by rental car companies, as well as set-price buy-back requirements. Chrysler’s decision to buy Thrifty and Dollar was part of a larger auto industry trend. General Motors Corporation had purchased minority interests in National Car Rental System, and Avis Inc., and Ford Motor Company had a minority stake in Hertz Corporation. This assured the companies outlets for their products, and with the acquisition of Dollar Rent A Car, Chrysler had a major rental agency outlet for its automobiles as well.

The Dollar Thrifty Automotive Group (DTAG) was formed as a holding company for the two Chrysler-owned rental car agencies in 1990 and spun off from Chrysler in 1997. Headquartered in Tulsa, it continues to this day as a major player in the rental car market, with more than 800 locations in the United States, and nearly 1,500 locations worldwide. Throughout the past two decades, DTAG has largely offered Chrysler, Jeep, and Dodge, vehicles within the United States. This changed in 2009, with the firm now offering American customers a diverse selection of Chevrolet, Ford, and Hyundai models as well.

Keith Knutsson has operated in a variety of real estate and financial investment capacities since the early 1990s, apart from EuroDollar and Dollar Rent A Car. He currently serves as Managing Director of real estate-focused Integrale Advisors, Inc., in Tampa, Florida.

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