Shanghai Volkswagen Leasing Co assembled a batch of cars for rental during World Expo 2010.
China Auto Rental advertises 24-hour service and convenient car rental procedures on a billboard in Shanghai. Jing Wei / For China Daily
China Auto Rental advertises 24-hour service and convenient car rental procedures on a billboard in Shanghai. [China Daily]
Other transport options lose luster as people go for the wheel deal, report Hu Yinan in Shanghai and Wang Yan in Beijing.
Air tickets are too expensive, trains aren't always safe, cabbies are on strike and car purchases are still limited. For bank clerk Lian Ping, it seemed as if all travel options had run out for her birthday trip from Beijing to Shandong province.
"It wasn't until a few days ago that I realized with my driver's license I could just rent a car and drive there," Lian said on Friday, four days before her 29th birthday. "The thought never crossed my mind before. I didn't even know people offered auto rental services here."
She decided to rent a Dongfeng Citroen for $15 a day and drive to Qingdao on Monday. The total cost, at $60, was only slightly more than if she took a train, Lian said. "It'd be more fun to drive."
The growth of car sales took an unprecedented downturn after officials withdrew stimulus policies and instituted measures to curtail traffic congestion, but corporate analysts and industry insiders say the auto rental market could become China's next big hope.
"Emerging car rental businesses will become the best propellant for the entire (auto) industry. The prospects are enormous," said Zhang Xiaolin, chairman of Haina International Auto Leasing, a Sino-Japanese joint venture in the eastern Zhejiang province.
By 2015, China's car rental market is expected to hit 400,000 vehicles and produce $2.8 billion in annual revenue, according to the China Taxicab and Livery Association. Consulting firm Roland Berger put that estimate at $5.9 billion.
"It's like real estate. In the end, the volume of rentals will definitely surpass sales," said Zhang Ruiping, chairman and CEO of Shanghai-based eHi Car Service, a major player in the market.
From 2 wheels to 4
Once known as the bicycle kingdom, China turned into one of the world's largest automobile consumers in just a matter of years. Its civilian automobiles soared from 31.6 million in 2005 to 91 million last year. That number is expected to hit 200 million by 2020, said Wang Fuchang, deputy director of the equipment industry department in the Ministry of Industry and Information Technology.
But after years of rapid growth, China's auto market, already the world's largest, is experiencing complex readjustments. In mid-July, Xinhua News Agency acknowledged that the car market "has created some serious problems: gridlock, pollution and energy shortages".
As private auto purchases slow, car rental companies and advocates have picked up a 2009 government work report by Premier Wen Jiabao - which stated, for the first time, that the administration would "facilitate the development" of the car rental market - as a green light from the top.
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