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Yangtze Delta News
Zhejiang Outlook
 
Rental cars zoom off the lot in peak holiday times
( zhejiang weekly )
Updated: 2011-09-20

By GUO MENGJIE and ZHONG HU

Increasing demand for cars during the Mid-Autumn Festival and the upcoming National Day Holiday is causing car rental services to step up their game.

According to several chain car rental companies, such as China Auto Rental (CAR), eHi Car Service and Topone Car Service, almost all of the cars that are available for less than 200 yuan ($31) per day were or have been reserved during these periods.

Among the cars with the rental price of 169 yuan at CAR, only Spark Hatchbacks were available for rent, while nearly all the cars less than 209 yuan had been booked, excluding the Peugeot 207 MT, Santana and Chevrolet Sail. Customers will have to wait a long time for these models.

Shao Wei, a staff from the marketing department of eHi Car Service, said that according to statistics, consumers booked cars two weeks prior to the Mid-Autumn Festival, much earlier than during the May Day holiday when they made reservations only three to five days in advance.

He guessed that the customers who did not book cars they wanted during the May Day were proactive in making reservations in advance for the Mid-Autumn Festival.

Similar to hotel accommodation reservations, car rental prices have increased dramatically, with prices skyrocketing to as high as one and a half times higher than average. For example, at CAR, the average day-rental price and weekend price of Peugeot 207 AT is 149 yuan and 179 yuan. The price during the Mid-Autumn Festival increased to 259 yuan per day.

At eHi Car Service, the rental prices of Volkswagen Polo, Lavida and Mazda, which usually have a 129-yuan price tag, have increased to 209 yuan, 259 yuan and 219 yuan per day. Although Volkswagen Lavida’s rental price was two times greater than before, these models were still booked.

“In the past, it is usually that small cars with low prices were the most sought-after by consumers. Now customers prefer fashionable and business car models, such as Chevrolet and Buick,” said Shao from eHi Car Service. “Businessmen are our main group of renters. Because of their lack of knowledge about the industry, they usually look for cheaper cars, but now they are choosing cars that are safer and more comfortable.”

As rental prices continue to increase, the rental threshold has also increased. Reservations to rent a car should be made at least three days in advance of the National Day at CAR. A representative from Topone Car Service advised customers to make their reservation for a car seven days in advance.

Despite their unwillingness to show rental rates, all car rental companies expressed satisfaction with their growth this year.

People in the industry thought that with more car rental companies receiving risk capital investment car rental prices would drop because of increasing competition. But the limitation of car purchases and climbing oil prices actually helped the development of the car rental sector.

A research report published by Roland Berger Strategy Consultants showed that the total market size of car rentals in China has reached 18.2 billion yuan, and could increase to as much as 38 billion yuan in 2014, with an annual growth rate of 20 percent. Currently, car rental companies that have obtained enough funding are buying more cars.

CAR spent 600 million yuan to increase its fleet from 6,000 to 13,000 cars within six months and is planning to increase the number to 40,000 by the end of this year.

 
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