Abstract: In the past three years, the market size of China's car rental industry has shown a steady growth trend. With the rapid advancement of urbanization and the change of personal consumption concepts, rental cars are gradually becoming a fashionable and convenient travel option, especially favored by the younger generation of consumers. In 2022, the market size of China's car rental industry reached 106.16 billion yuan, a year-on-year increase of 25.01%, which reflects the vitality and potential of the industry. The Chinese government has given active support and guidance to the car rental industry, especially encouraging the application of new energy vehicles in the leasing field, which will strongly promote the green and intelligent development of the car rental industry. At the same time, the government has also strengthened the supervision and management of the industry, committed to standardizing the market order, effectively protecting the rights and interests of consumers, and creating favorable conditions for the healthy and sustainable development of the industry.
1. Definitions and Classification
Car rental refers to the business mode in which the leasing operator delivers the leased car (including cargo truck and passenger car) to the lessee for use within the agreed time, and does not provide driving services. The essence of car leasing is to obtain income through the right to use the car on the basis of separating the property right and the right to use the car, and the subject matter of the lease includes all the procedures and related values to ensure that the vehicle is normal and legally on the road in addition to the physical car. Car rentals are divided into long-term leases and short-term leases based on the length of delivery and acceptance time.
Second, industry policies
1. Competent authorities and regulatory system
The main departments of car rental include the National Development and Reform Commission, the Ministry of Transport, the Ministry of Industry and Information Technology, and the State Administration of Financial Supervision and Administration. Among them, the National Development and Reform Commission is responsible for the management of the industry from the macro policy level, including the research and formulation of industry development strategies, guidelines and policies, and overall planning. The Car Rental Industry Association is mainly a self-regulatory organization such as the China Communications and Transportation Association. The China Communications and Transportation Association is supervised by the National Development and Reform Commission, and the association mainly focuses on transportation and logistics to carry out research and consultation, international exchanges and cooperation, personnel training, etc., to assist the government and help enterprises to carry out their work.
2. Industry-related policies
In recent years, China's car rental industry has continued to receive government support. In January 2024, the National Development and Reform Commission and other four departments issued the "Implementation Opinions on Strengthening the Integration and Interaction of New Energy Vehicles and Power Grids", proposing to actively explore the two-way charging and discharging application mode of efficient integration of new energy vehicles and parks, buildings, family residences and other scenarios. At the same time, priority will be given to building a number of two-way charging and discharging demonstration projects for vehicles in the public domain such as official business, leasing, shuttle buses, school buses, sanitation, and public transportation. The policy encourages the application of new energy vehicles in the leasing field, which will help promote the green process of the car rental industry. With the continuous maturity of new energy vehicle technology and the increasing expansion of the market, more and more consumers have begun to accept and choose new energy vehicles as a means of travel. The introduction of this policy will further stimulate the potential of new energy vehicles in the leasing market and promote the development of the car rental industry in a more environmentally friendly and efficient direction.
Third, the development process
The development of China's car rental industry has gone through a period of embryonic development, start-up, shock and rapid development. The embryonic period from 1989 to 2001. In 1998, China's first car rental company was born in Beijing, and the first car rental company was Beijing Taxi Car Rental Branch, whose main purpose was to provide services for the Asian Games, and since then China's car rental industry has entered its embryonic period. The car rental market started, and the players were mainly large state-owned enterprises: mainly to meet the supporting needs of special scenarios such as governments and events, and the first car rental company was Beijing Taxi Car Rental Branch, and at the same time, international car rental companies were on the verge of bankruptcy, and international car parks tried to find new car rental markets.
Start-up period from 2002 to 2012. Private and foreign-funded enterprises entered the market and jointly cultivated China's car rental market: a new domestic leasing company represented by eHi was established, and overseas car rental giants represented by Hertz and AVIS entered China. In the decade from 2002 to 2012, the Chinese market entered the stage of multi-party entry and a hundred flowers. Emerging leasing companies in China, represented by eHi, have emerged to explore opportunities in the car rental market. At the same time, the international car rental industry continues to acquire and merge, and after the overseas car rental forces represented by Hertz and AVIS enter the Chinese market, they continue to integrate the market and expand their business territory.
A period of volatility from 2012 to 2020. The change of travel mode has led to the gradual rise of consumer leasing and the consolidation of the industry. With the rise of domestic consumption, consumer leasing has become an important growth engine for the car rental industry, and leading enterprises continue to expand their market share by virtue of their operational capabilities. At this stage, the market demand structure of structural car leasing has changed, the short-term rental market dominated by individuals has begun to start and gradually expanded, the scale of enterprise operation has also expanded simultaneously, and the price of automobiles has continued to rise, so that the profits of car rental companies have been continuously eroded, and the profit margin of the industry has been declining year by year, and many enterprises have been hit or even withdrawn from the market at this stage.
A period of rapid development from 2020 to the present. Technological innovation, industry transformation, and the introduction of new technologies such as autonomous driving, new energy, and mobile Internet into the car rental industry have brought new opportunities. China's car rental industry has been adjusted and upgraded, large traditional leasing enterprises are actively transforming, time-sharing leasing and financial leasing are on the rise, and global leasing business is expanding, new technology, new consumption and new platforms are promoting the continuous transformation and renewal of the industry, and Chinese car rental companies are actively exploring the impact of cutting-edge technologies such as mobile Internet, autonomous driving and new energy on the industry, and actively layout and actively carry out technological changes.
Fourth, industry barriers
1. Policy and regulatory barriers
The development of China's car rental industry is strictly regulated by policies and regulations. The government has clear regulations on the access conditions, business licenses, vehicle management and other aspects of the car rental industry. For example, rental vehicles must meet relevant national standards, and enterprises need to hold corresponding business licenses and road transport business licenses. These policies and regulations limit the speed of new entrants and raise the bar for the industry. At the same time, for existing enterprises, it is also necessary to constantly adapt to policy changes to ensure compliance operations. In addition, the government's tax policy on the car rental industry also has a certain influence. For example, changes in tax policies such as purchase tax and vehicle and vessel tax on leased vehicles will have an impact on the operating costs of enterprises. Therefore, when formulating business strategies, enterprises need to fully consider policy and regulatory factors to ensure compliance operations.
2. Financial barriers
The car rental industry requires a lot of capital investment, first of all, car rental companies need to invest a lot of money in vehicle purchases. In particular, high-end, luxury models and new energy vehicles are more expensive and need more financial support. Secondly, car rental companies need to bear the cost of vehicle maintenance and maintenance, as well as other related costs, such as employee compensation, operating leasing platform fees, etc., which require a large amount of capital investment. Especially in terms of new energy vehicle leasing, enterprises need more financial support to meet the rapidly growing market demand. Therefore, the financial barrier is one of the important barriers in the car rental industry.
3. Brand and market barriers
With the intensification of market competition, popularity and brand influence have become important factors for enterprises to stand out in the market. Well-known brands can attract more customers and partners, increase the market share and bargaining power of enterprises. Building brand influence requires long-term accumulation and self-improvement. Enterprises need to provide high-quality services, guarantee the safety and reliability of vehicles, and good after-sales service. At the same time, it is also necessary to increase brand awareness through advertising, social media and other means to attract more customers and business partners.
Fifth, the industrial chain
1. Analysis of the industry chain
The upstream of the car rental industry chain mainly includes car manufacturers, Internet platforms, auto financial service providers, individual car owners, etc., the middle of the industry chain includes Internet car rental companies, offline car rental companies, car manufacturers, etc., and the downstream of the industrial chain includes end consumers, government agencies, and second-hand car dealers.
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