August 30, 2010

The battle of the rental cars wages on in China

Filed under: Automotive,Ymer News — Administrator @ 12:23 pm

China’s rent car war is heating up – in a big way. Ymer backed China Auto Rental which recently received US$150M from Legend Capital has a viable sparring partner in the billion dollar rental car ring on the back of Goldman Sachs reported US$70M investment into Shanghai based eHi Car Rental.

If you are interested, have a read of the article Wall Street Journal reporter, Jonathan Shieber, posted last week on WSJ blog Venture Capital Dispatch titled “With $70M, China’s eHi Car Rental Looks To Untangle Traffic Snarls”.

According to Shieber, eHi, in addition to operating a more traditional rental car model, is also looking to emulate Boston based Zip Car’s model (short-time inter-city rentals). I have serious doubts China is ready for this model, and that eHi is looking more at the PR value than the RMB value.

It took Zip Car almost a decade to build traction in the US, where there already was a rental car culture, a community around ride-sharing, and public parking lots conveniently located in multiple city locations; all three are still nascent concepts in China.

Let’s see how this plays out. It will be interesting, for sure. Most likely, though, you’ll see the traditional rental car model (with flavors of Chinese localization) proliferate long before Mainlanders are Zipping in and out of cars.

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