Auto rentals revving up
- Source: Global Times
- [08:36 January 28 2011]
- Comments
Fast expansion but fragmented
Convinced that a huge market exists for car rentals, increasingly more competitors are driving into the burgeoning sector and analysts said the market might face a reshuffle.
Unlike in the early 1990s when China's car rental business started providing rental services by State-owned companies mainly to companies instead of individuals, there are currently more than 5,000 domestic registered rental agencies and several well-known foreign players are in the country, according to CIC Industry Research Center.
"Today's market is highly fragmented. Combined with some non-registered companies, the actual number of auto rental agencies passed 10,000, with the top 10 companies accounting for no less than 10 percent of the country's whole market share," said CIC Industry Research Center senior analyst Li Yemen.
Demands for rentals probably will amount to 300,000 to 400,000 vehicles as of 2015, the research center predicted.
"The domestic car rental business has begun a faster expansion period since foreign companies began investing in the immature market," Li said.
Mitsubishi Corporation of Japan signed an agreement in November to invest $20 million to set up a joint venture with Zhejiang-based Cheeyo Car Rental.
A consortium led by Goldman Sachs Group Inc invested $70 million in August in Shanghai-based eHi Car Rental, which plans to expand its business within one year to about 100 cities in the country.
US car rental giant Avis, which entered the China market eight years ago, plans to expand its offices from the presently 38 to around 500 as of 2015, Zhong Xiaoli, a marketing manager with Avis China said. Currently Avis China covers 28 cities.
Avis China has more than 80 percent of the high-end customers from the top 500 global companies in China since people working for international companies are familiar with Avis, Zhong said.
