Baby, you can drive my car
- Source: Global Times
- [11:32 November 22 2010]
- Comments
Avis drivers give people the opportunity to experience the micro cars at the Expo.
Setting the price high
The prices Avis has set could be considered beyond the budget of many white-collar workers in China; a BMW mini costs 800 yuan per day and a Buick GL8 costs 700 yuan per day. A Mercedes Benz S350 costs 1,100 yuan per day and can only be rented to long-term customers such as business people on expat packages. Avis claims to provide the same quality service it does in other countries, and compared with prices in other countries there is not much difference. "We have a solid reputation around the world and a history of 65 years," Shirley Zhong, the marketing manager of Anji Car Rental, said. "We are the McDonalds or Starbucks of the car rental industry." However, it seems the company is primarily targeting high-income earners both Chinese and foreign.
In China, local entrepreneurs have caught on that there is still a potential market for car rental out there. After starting his own software company in the US, Zhang Ruiping returned China and founded eHi Car Service in 2006. Like other Chinese car rental companies, competitive prices are the major advantage, a brand-new Chevrolet, for example, can cost as low as 99 yuan per day. After attempting to sell his software designs when he first returned to China, Zhang realized that he could use his IT knowledge and start his own car rental company. He has built an enormous technological platform which includes a propriety rental booking management ERP application, coupled with a comprehensive GPS system and electronic back end billing system. Such an e-commerce strategy has helped reduce costs and kept prices low.
Both companies admit that the car rental business in China is still in the very early stages. "Car renting has a long history in the West; it was first introduced to China by business people with an international background. The business mainly focused on long-term renting for businesses and now it is being extended to individuals," Peng told the Global Times. "Shanghai is an international metropolis; its consuming habits lead the whole country. As a commercial center, it receives business people from around the world and quickly absorbs the most cutting-edge ideas." Shanghai is also surrounded by tourist attractions which raises the demand of car rental for sightseeing.
