Chinese car rental market led by China Auto Rental

The Chinese car rental market has been forecast to increase at a constant value compound annual growth rate (CAGR) of 17% over the next five years, reaching a value of RMB62 billion by the end of 2017.

Strong demand for car rental is set to derive from the stable economic development which is anticipated in China and which is set to be one of the major drivers of growth in the category.

Economic development in China slowed down during 2012, which resulted in a less robust value growth in car rental over the course of the year. The 25% current value growth recorded in car rental in 2012 was much lower than the 62% current value growth recorded in the category during 2011.

According to a recent market report, 'Car Rental in China,' business car rental remains more important than leisure car rental, with business car rental expected to account for 54% of total car rental value sales in China by the end of 2017, up from the 52% recorded in 2012.

Airport car rental is set to register a stellar performance over the next five years, rising in constant value at a CAGR of 19%, considerably outperforming non-airport car rental.

A high level of capital input is essential as companies within the industry need to purchase a large number of cars for operations. In addition, car maintenance expenses, insurance fees and fleet storage expenditure are required for new entrants.

China Auto Rental Holdings Inc maintained the leading position in the highly fragmented China car rental market in 2012 with a value share of 4%, an increase of one percentage point from 2011, the highest gain in value share in the category over the year.

As the largest car rental operator in China in terms of the scale of its corporate operations, China Auto Rental has been playing an active role in stimulating growth in the category as its continued expanding its national presence throughout 2012 with the opening of several new service points in China's second-tier and third-tier cities as well as in the country's major cities.

By the end of September 2012, the company had over 600 service points in 66 cities and 52 airports across China.

For more information on the Chinese car rental market, see the latest research: Chinese Car Rental Market

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