AUTOS : Hertz to Cut Orders Due to Price Hikes : Sales: The nation’s top car rental firm says it will buy one-third fewer ’93 models and will hold onto them longer.

Hertz Corp., the nation’s leading car rental company, expects to slash its purchase of 1993 models by a third to cope with big price increases from Ford Motor Co. and General Motors Corp., its top official said Tuesday.

Hertz Chairman Frank Olson said the auto industry’s efforts to regain profitability have raised the cost of buying cars by 35% to 58% since the start of the 1992 model year.

While the rent-a-car business has already been hit by recession and price competition, Olson said the move by auto makers has saddled the industry with a huge and sudden surge in costs.

Car makers depend on fleet purchases for roughly a third of overall sales, keeping assembly lines running and clearing excess inventory.

But the big sales to companies such as Hertz have also eaten into retail car sales by flooding dealerships with vehicles that are only a few months old but a lot less expensive.

Until last year, the Big Three auto makers--GM, Ford and Chrysler Corp.--offered car rental firms hefty discounts to facilitate fleet sales.

Olson said the practice was not unrelated to the fact that auto makers have holdings in most leading car rental companies. Ford, for instance, owns 49% of Hertz.

“It has been less expensive to keep plants open and sell cars to themselves than to shut plants down,” he said. “But now, companies aren’t discounting.

“Ford raised prices. GM did the same. The cost to the car rental industry is $400 million to $500 million in a sudden across-the-board impact.”

As a result, Park Ridge, N.J.-based Hertz will reduce the number of cars it buys from auto makers and extend the amount of time it holds onto vehicles to as long as nine months, three months longer than now.

The car rental company bought about 300,000 cars in the 1992 model year, which ends this month, mainly from Ford and GM, but also from Mazda Motor Corp. and Toyota Motor Corp.

“We believe that will be cut by one-third,” said Olson, who also predicted that keeping cars in Hertz garages longer will reduce vehicle orders by 43% in the fourth quarter of the year.