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Car rental industry breaks: two giants folded halberd from foreign capital to the local Mitsuo contending for hegemony

10 years ago, values the Chinese market by foreign car giants through this round of capital influx can usher in change?
After a month of rumors in the market, Lenovo will inject a private car hire company news is finally settled. On September 15, Legend Holdings Announces equity and bond to the China auto rental companies inject 1.2 billion yuan in cash. Sixth subsidiary company of China auto rental is not only a legend, also received billions of Yuan of bank credit. "Lenovo" signs, huge amounts of funds and "Godfather of Zhongguancun" Liu in person at the scene, threw an exception would make the investment concern.
On August 26, the headquarters is located in Shanghai's Hi car leasing has just announced that access to some Goldman-led a total amount of $ 70 million in third round financing. Car rental industry has two huge capital, the so-called "invisible ceiling" of the emerging industry has become a hot industry competition will surely break.
Two giants folded halberd from foreign capital to the local three DuPont
The plane at the airport, rent a car and drive away, the common story in foreign films for people is very strange, although as early as 1989 to organize at the Beijing Asian Games, car leasing began to occur in China, but it was not until the turn of the century, the industry has staged a breakthrough.
In 2002, has a decades-old foreign car rental Giants Hertz and fly at the same time China "WTO" good prospects. Hertz through testing the water with the steam in China, used by the latter to join formally Hertz brands operating in China, but the 5-year agreement deadline not to, in 2005, Hertz franchise was closed. Choose Avis for joint ventures to China also have not been able to grow bigger.
Overseas car rental Giants folded when the halberd, China's auto market since 2005 really began a period of rapid development, China and a Hi, extreme and a number of local car rental companies emerge. January 2006 established of extreme car rental, first will from guarantees, and from deposit, and brush credit card car rental, and chain business, mode introduced China; that same year, Zhang investment 10 million Yuan established a Hi car rental, using independent development of set car management ERP system, tie precise of GPS global positioning system and full electronic of of background bill processing system, established has himself of technology platform, and first network reservation of car rental service; 2007 end of, Founded the UAA (United Automobile Club) Lu Zhengyao also come up with 50 million Yuan into automobile leasing market, the establishment of China auto rental.
Three companies have opted for national strategy and network management model, and eventually formed the "North China, East and South King" competition. Seen from the pattern, China and the luxury chain of Hertz car rental model for reference, business car chain + direct way. But which higher operating costs, so that China and the extreme delay in achieving significant profit. Hey are cement + mouse model of e-commerce while providing self drive and chauffeur and other rental services. Flexible rental car, cab service makes a rapid growth, announced during its second year profitable.
"We did draw a Hertz rental car giant's model in foreign countries, but the car is not as IT is so high tech, the real difficulty is the capital bottleneck. "President Lu Zhengyao told Business Weekly China auto rental, because most of these car rental companies the first amount of financing at about $ 20 million to 40 million, several car rental companies after several years of development, always lingers in the scale of the thousands of vehicles, there is no absolute number one in the industry.
Car rental industry is indeed a scale economy, must reach a certain size to reduce cycle operating costs in order to make a profit, but in order to maintain an adequate fleet will naturally have a lot of money. According to statistics, China currently has more than 4,000 number of car rental companies, car rental total about 40,000 vehicles, but 80% vehicles of which less than 50 units, 70% of enterprises with fewer than 5 full-time employees, 10 of the largest car rental company market share even less than 10%, industry concentration is very low.
"Lenovo this capital injection for China than an IPO. "Lu Zhengyao say access to Lenovo after the capital injection, China auto rental plan within the next two or three months on fleet expansion to 10,000 over the next 5 years will continue to expand to 100,000 vehicles, business covers more than 130 cities worldwide. After the EHI is the new capital, also has similar expansion plans will be increased to 10,000 in the past year, service network to 100 cities. The two companies also plans to promote listing in the past one or two years.
Shuffle coming?
Experience from home and abroad, the per capita GDP reached us $ 1000, with the upgrading of the consumption structure, cars will be irreversible tendency into people's lives. Authoritative data shows China motor vehicle driver's license holders have more than 120 million people, demand for cars is the mass. However, if all the cars to meet huge demand, will no doubt land have a devastating impact, energy, environment, transportation. In August this year for more than 20 days of the Beijing Tibetan high-speed traffic jam caused by a rain of September Beijing, enough to illustrate the point. Instead, rent a car as a new form of automobile consumption, will no doubt be a solution to urban congestion and pollution problems solution.
According to the strategy consulting firm Roland Berger Strategy Consultants study, starting in 2005, China's car rental market continued rapid growth, compounded annual growth rate as high as 30%. The market within the next 5 years will rise at a rate of about 25% per year, which means that by 2014, China's fleet will reach 400,000 car rental market, annual turnover has reached 38 billion yuan.
See the huge potential of the market, apart from car rental companies are busy staking out, many automotive manufacturers also intended to carve up "the cake". First half of this year, Beijing Benz joint dealers and international lease finance company, launched major car rental business for enterprise customers. Famous tourist site the same way formal involvement of the network in October 2009 from the car rental industry, with its scenic spots, hotels, air tickets and other online business, same way network in less than a year later to expand to more than 100 cities nationwide to provide business car rental reservation service, to become the largest car rental booking platform.
But obstacles to the car rental industry is not only the size. "In addition to financing, rental car industry where success, still need a lot of support policies. "EHI CEO Zhang told the business weekly, admits that despite the continuous progress of the personal credit system in recent years, in 2009, Premier Wen Jiabao in the Government work report made explicit reference to" improve automobile consumption policies, accelerate the development of the used-car market and car rental market ", but the legal system is not perfect, Government support measures are still insufficient.
Such as leasing vehicles after a traffic accident occurs, General car rental companies to get the business interests of the Court to award their bear joint and several liability of fault; when cars are in violation of traffic law enforcement to punish vehicle owners, if the lessee does not undertake responsibility, only by the car rental company to be punished. In addition, malicious default in rent payment dispute, the public security organs inadmissible on account of most of the action of an economic contract, and the court notifies the defendant appear before the buck to the leasing company.
It is understood that the 1998 State had promulgated the provisional regulations on management of the car rental industry, clearly is the car rental industry Management Department of the transportation departments, and require the conditions required by the car rental company. However, with the end of 2007, the repeal of the provisional regulations on the management of the car rental industry, car rental there is no special regulations. This year's "two sessions" during the Zuo Yanan, Chairman of Anhui jianghuai automobile has said that no specific legal constraints, car rental companies and car rental customers will take a huge risk.
"Up despite its Hertz model in China, but the country still has a lot to learn from them. "Analysis of Tsinghua University Li daokui, Director of the Center for China and the world economy, foreign car rental companies the choice of models, management models, these were China's car rental companies need to learn. Once investment EHI Tong Shihao Qiming Venture partners also believe that car rental industry is a capital-intensive industry, but high risk, high return on investment, low industry characteristics, but also car rental companies in the technology management, business models, services continues to invest, can lower cost and fast profit.
Price is the most important factor affecting consumer rental cars. China auto rental substantial fall in rentals since the beginning of August by 30%-50%, after a large amount of capital into, competition will no doubt help to reduce rents to attract more consumers, so as to further expand the size of the market.
Mitsuo contending for hegemony, now both of them have been heavily supported, the extreme left to do? According to China auto rental market rumours are the propriety of Supreme, Supreme is expressly denied to reporters, Lu Zhengyao, smiling without a Word, saying only that future might be on some car rental companies post merger integration.
"Although our relationship with China is a competitor, but Lenovo's affiliation to the car rental industry's long-term development is definitely a good thing. "Zhang said the car rental industry will present a series of capital operation to promote industrial upgrading and breakthroughs will also intensify competition in the market," but the core of the service is competitive, only there is fierce competition, level of service, it is possible to continuously improve. " So, whether it's legend into the car rental industry, and each consortium supports EHI, will change the distribution of the past are too small, reshuffle will bring the industry into a new stage.
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