Car Rental Supply in China Not Meeting Demand

The Chinese car rental market saw a boom during the three-day Mid-Autumn Festival in September a traditional holiday for family reunions and the National Day Holiday.

"We doubled our car fleet to more than 1,000 vehicles this year in China," said Terence Chiu, general manager of Avis Car Rental in China. "But, still, supply is greatly outnumbered by demand."

Before the Mid-Autumn Festival, bookings flew in a week in advance. With the national holiday, 70 percent of Avis’ cars were booked two to three weeks in advance, Chiu added.

Domestic car rental companies have experienced similar results as international firms. They have been more aggressive in their marketing strategies and expansion in recent years, launching advertising campaigns at places including metro stations and central office buildings months ahead of the festival and National Day Holiday.

Bookings with Shenzhou and eHi Car Service, two of the major players in the market, showed that during the Mid-Autumn Festival, all cars costing no more than 200 yuan a day to rent were fully booked. Just before the National Holiday, budget cars at these companies, such as the Mazda 2 and BYD FO, were no longer available.

Not surprisingly, the price of car rentals is also climbing along with the soaring demand. According to a salesman with eHi Car Service in Shanghai, rental fees have risen an average of 50 to 60 percent, and 100 percent for some popular models.

Cars must be leased for at least three days during the National Day Holiday. But despite the higher threshold, customers are not being deterred.

Increasing investment from venture capitalists into the capital-intensive business is one of the major driving forces behind the industry's growth, allowing rental companies to buy more new cars and launch wider promotions.

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

Autonomous Vehicles and the Changing Role of the Fleet Manager

With fewer drivers and substantially longer fleet lifecycles, fleet managers will pivot to new job functions.

2017: Fleet Mix Will Be Paramount

Car rental companies are migrating to vehicle segments with better residual values, though not without bumps in the road.

Auto Rental Summit: Five Trend Lines

Taking in the seminars, discussions, and networking at the 2016 Auto Rental Summit, trend lines emerged around shifts in model mix, data protection issues, increasing labor costs, workforce engagement, and new platforms to rent cars.

Job Finder: Access Top Talent. Fill Key Positions.