Car rental industry insiders call for market regulation

• Source: CNTV.CN
• [10:12 January 18 2011]
• Comments

Perfecting vehicle consumption policies and accelerating the development of the car rental market was incorporated into Chinese Premier Wen Jiabao's government work report in March 2009. The national "Automotive Industry Restructuring and Revitalization Plan" has also called for accelerating the development of the car rental industry. Today, a series of policy signals have provided new opportunities for the leap forward of the car rental market. However, this does not mean that the industry's future development will be smooth. Sun Bo, a legal consultant at the Nanjing Road Transport Association, said frankly that there is neither administrative departments to manage the vehicle rental industry in China, nor serious laws and regulations governing the specific business scope and operating modes of the vehicle rental industry.

For instance, Suzhou has put the charter vehicle services under the management of the transportation authorities, but it has no supervision on other types of vehicle rental services. Officials from the transportation departments in Nanjing said that the charter vehicle services should be considered as part of the vehicle rental services.

There was a thought-provoking lawsuit in Beijing in 2009. Beijing Jingtu Car Rental Company was fined 60,000 yuan by the Beijing Municipal Transportation Law Enforcement General Team (BJJTW) for providing driver services while offering car rental services. Beijing Jingtu Car Rental Company filed an administrative lawsuit to the court. The BJJTW said in its statement of defense that the fundamental difference between vehicle rental services and charter passenger vehicle services lies in whether or not driver services are offered. Offering driver services should be considered as charter passenger vehicle services. Car rental service providers are required to obtain the administrative approval to offer chartered passenger vehicle services. Beijing Jingtu Car Rental Company which had not obtained the administrative approval finally lost the lawsuit.

However, more and more car rental firms have in fact offered driver services. "As commercial clients need to act as rich businesspeople on many occasions, is it possible for them to rent cars without drivers," said industry insiders. They believe that such regulations will restrict the development of the car rental industry.

An executive of an auto rental firm who was unwilling to reveal his name complained that there are administrative departments and industry associations for every industry except for the car rental industry. "We grow like a neglected wild lily, and hope that this industry can develop in size and strength and call for related departments to provide this market with regulation and support."