Young people love "slow-charging travel", which has boosted the 100 billion yuan car rental market

As self-driving travel becomes a new trend in tourism, the car rental market is experiencing rapid development. During this year's National Day holiday, the proportion of self-driving travel is expected to exceed 80%. Car rental travel is popular among young people, especially the rise of "slow-charging travel", which has led to a flourishing car rental market.

"We have rented a car (SUV) in Kashgar for the National Day holiday. There are two of us and we are looking for a partner! 1-2 people are fine, gender is not limited, and it would be best if one of them can drive." On Xiaohongshu, such posts about finding a partner to rent a car together are common.

During this year's National Day holiday, the tourism market returned to normal and became increasingly hot. On October 7, Ctrip, Fliggy, Zuzuche and other platforms released National Day-related consumption reports. Reports from multiple platforms showed that during the National Day holiday, the average daily orders for outbound and inbound travel on the platforms exceeded those in 2019.

Self-driving travel has become one of the fastest growing travel modes in the tourism market in recent years, and the car rental industry has also recovered. According to the data from the Ministry of Transport, the proportion of self-driving travel during this year's National Day is expected to exceed 80%, reaching 1.526 billion trips.

As self-driving becomes a new trend in tourism, renting a car in the local area and traveling along the picturesque roads has become a new travel choice for many people. In the hundreds of billions of car rental market, major players such as China Auto Rental, eHi Car Rental, Ctrip, and Fliggy are playing a "speed and passion" game.

01. Behind the car rental boom, “slow-charging tourism” is coming

A "working person" with the online name Shirley started her vacation two days before the National Day and decided to seize the opportunity to go to Hainan for an "off-peak trip."

Shirley also decided to experience renting a car and driving during this trip. "The itinerary is to fly to Haikou at night and stay overnight, rent a car in Haikou the next day and drive to Lingshui for two days, and then return to Haikou to return the car. The reason for renting a car is that it will be more convenient to travel to Lingshui, and secondly, I have never experienced renting a car before, so I took this opportunity to master a skill."

Image source: screenshot from Xiaohongshu

But the inexperienced Shirley had a lot of twists and turns in the car rental process. Shirley planned to rent a car in Haikou, and set the rental and return locations on the Hello APP to Haikou. She chose a Corolla Hybrid from the top of the recommended vehicles, but Shirley didn't notice that there was a small text below the order, "Go to the store to pick up and return the car yourself, the straight-line distance from the store is 213.9km."

"I didn't realize what this sentence meant at the time, so I happily ordered the car.

After I boarded the plane at 9pm, I received a call from the owner of the car dealership saying that the previous customer of the Corolla I booked might not have a car available, so I had to change to another one. I was about to take off, and I felt that it was difficult to explain it over the phone, so I asked the owner to add me on WeChat. Then the owner sent me the store address on WeChat. I saw that it was not right. Why was the store in Sanya? Didn’t I rent a car in Haikou? "

When Shirley confirmed on the APP, she found out that she had to go to Sanya to pick up the car by herself. The distance from Haikou to Sanya is nearly 300 kilometers.

"I trusted Hello so much, but they cheated me. I chose Haikou as the pick-up location, but the car recommended to me was in Sanya. I realized the meaning of the small print only then. People like me who rent a car for the first time may not notice this problem, so I quickly canceled the order and ordered a Honda Fit on another platform."

However, the initial setbacks did not affect Shirley's overall journey. Shirley shared on Xiaohongshu, "Overall, the car rental experience was good. I also bought insurance for 51 yuan a day, so I am basically not afraid of minor bumps. I will have more choices and attempts when I travel in the future."

More and more people like Shirley are traveling by car across the country. Mafengwo also released a list of "Top 10 Popular Domestic Self-Driving Routes during the 2024 National Day Holiday", including the Northern Xinjiang Loop, 318 Sichuan-Tibet Highway, Shanxi and other self-driving routes.

Image source: Mafengwo screenshot

Didi data shows that during the National Day holiday, Didi car rental orders increased by 65% ​​year-on-year, with long-term rental demand being particularly prominent, with orders of more than 4 days accounting for 60%. Fliggy data shows that domestic car rental bookings increased by more than 40% year-on-year.

Data from the "2024 Summer Car Rental and Self-Driving Report" released by Ctrip shows that the number of domestic car rental and self-driving orders during the summer of 2024 increased by more than 40% year-on-year; the number of daily orders during the summer broke the platform's historical peak, an increase of 50% year-on-year; the average per capita cost of car rental increased by 20% compared with last summer.

Image source: Ctrip

According to the "2024 National Day Tourism Consumption Report" released by Ctrip Travel, due to the recovery of the supply chain of air tickets, hotels, etc., consumers no longer pursue the "fast-charging tourism" of special forces tourism, but prefer "slow-charging tourism" without rushing, planning, crowding, or checking in.

"The National Day holiday is a long holiday across the country, and many people choose to travel, especially self-driving tours, which has become a popular choice, so there is a large demand. Secondly, the development and popularization of car rental platforms have made the car rental process simpler and more convenient, attracting more people to choose to rent a car for travel.

In addition, as people's living standards improve, more and more people have the financial means to rent a car, which further expands the car rental market." said You Xi, a senior financial professional and co-founder of the Communication Planet APP.

The "slow-charging travel" car rental travel method is very friendly to family tours, local tours, and group tours. Therefore, in the past two years, posts about car rentals have also exploded on social platforms.

Data from the Internet big data collection and analysis platform "Shushuo Juhe" show that in the past three years, the content volume of "car rental" on major social and short video platforms has been steadily increasing. The overall volume in the third quarter of this year has significantly exceeded the data in the same period of previous years, with a year-on-year increase of up to 280%.

02. The car rental market is booming, who will be the big winner?

While car rental is a popular way of travel among young people, choosing a good car rental platform has also become the most concerned issue for young people.

On Xiaohongshu, among car rental related topics, content about "Which app platform is better for car rental" ranks first, with more than 3.11 million notes. In addition, there are also car rental guides, pitfall avoidance guides, car model recommendations and other content.

Image source: screenshot from Xiaohongshu

In the online car rental market, there are vertical car rental platforms such as CAR Inc. and eHi Car Rental, as well as OTA platforms such as Ctrip and Fliggy, and P2P car rental platforms.

Among the vertical car rental platforms, China Auto Rental and eHi Car Rental are the leading players. According to the "2024 China Self-Driving Travel Report" (hereinafter referred to as the "Report") released by the "New Era Culture and Tourism Research Institute", China Auto Rental and eHi Car Rental have a market share of 24% and 18% respectively, ranking first and second.

During this year's National Day holiday, due to the popularity of car rentals, the app and mini-programs of China Auto Rental crashed and could not be operated. In response, China Auto Rental said, "Because of the large number of car pick-ups and returns during the National Day holiday, it caused short-term congestion."

Image source: Xiaohongshu APP

Due to the system crash of China Auto Rental, some consumers were unable to pick up their cars and travel smoothly, resulting in the ruin of the entire National Day holiday.

"It is because of the big platform that we trust it, but this happened this year. The platform started to crash at noon today (October 2), and it was still not fixed by the evening. The system is not working and we cannot pick up the car, travel, and the hotel and tickets we booked are all wasted.

The final solution was: Cancel your order for free. Who will pay for the lost hotel fees? Who will pay for the ticket fees? Don’t we need to consider the mental and time loss costs? "Netizen "六六晒太阳" complained on Xiaohongshu.

Image source: Xiaohongshu APP

CAR Inc. was founded in September 2007 by capital tycoon Lu Zhengyao. In 2012, CAR Inc. attempted to go public on the Nasdaq but ultimately failed. Two years later, it was successfully listed on the Hong Kong Stock Exchange.

However, on July 5, 2021, MBK Partners completed its full acquisition of CAR INC. Since then, CAR INC has become a wholly-owned subsidiary of MBK Partners. On July 8, 2021, CAR INC completed its privatization and delisting.

As of now, China Auto Rental has service outlets in all provinces in mainland China, with a fleet size of approximately 160,000 vehicles and nearly 170 million registered members. In 2023, China Auto Rental launched a total of 70,000 new vehicles.

Image source: Canned Image Library

As the largest vertical car rental platform in China, CAR Inc. is also both "red and black". On the "Black Cat Complaint" platform, there are 3,136 complaints about CAR Inc., mainly involving disputes over handling of traffic violations, failure to register vehicles, and poor customer service response.

In addition to vehicle-related issues, the price of China Auto Rental is also controversial. A user said that he planned to go to Gannan for a self-driving trip in August. From July 29 to August 3, the price of renting a Nissan Loulan at Lanzhou West Station increased from 376 yuan/day to 527 yuan/day, and the price of renting a Tank 300 increased from 468 yuan/day to 662 yuan/day.

Image source: screenshot from Xiaohongshu

But after a week, the vehicle rental prices began to fall; on August 12, the price of Nissan Loulan dropped back to 399 yuan per day, and the price of Tank 300 dropped back to 504 yuan per day.

Image source: screenshot from Xiaohongshu

Another user said that he booked three days from October 4 to 6 on Shenzhou Car Rental on October 1, and the total cost including insurance was 1,684 yuan. However, he found that the same car on the platform on October 3, renting from October 4 to 6, was more than 400 yuan cheaper than before.

Since a service fee is charged for canceling an order, the user tried to modify the order, but found that the price displayed on the modification page was nearly 200 yuan more expensive per day than the price displayed for direct booking.

Image source: screenshot from Xiaohongshu

eHi Car Rental was founded in 2006 and mainly provides car rental and chauffeur services. It initially provided B2B services only to corporate users, and then gradually expanded to the C-end. After switching to the C-end, eHi Car Rental's order volume and fleet size grew rapidly. So far, its business has spread to more than 500 cities, with more than 80,000 cars.

Aggregate car rental platforms such as Ctrip, Fliggy, and Didi are also important players in this car rental war.

According to the report, in the online car rental market, Ctrip Car Rental and Fliggy Car Rental ranked third and fourth with market shares of 13% and 10% respectively.

Ctrip's National Day car rental big data shows that during the Mid-Autumn Festival and National Day in 2024, domestic car rental orders increased by 120% compared with the same period in 2023, with an increase of 12.5% ​​during the National Day alone. At the same time, overseas car rental orders increased by 116%.

Image source: Canned Image Library

In March 2024, Zhang Ye, head of Fliggy Car Rental, said at the Fliggy Car Rental Ecosystem Conference that the turnover of Fliggy Car Rental in 2023 will increase by 160% year-on-year compared to 2022, and more than 10 times compared to 2019. Both the annual growth rate and the compound growth rate over the past four years far exceed the performance of the domestic car rental market. Zhang Ye also revealed that the growth target of Fliggy Car Rental in the next three years is to double every year.

In addition to the vertical CAR and eHi CAR, as well as the OTA platforms Ctrip and Fliggy, there are also some small and medium-sized online players, namely P2P car rental.

P2P car rental is a way of renting cars from one person to another, using the Internet technology to rent idle private cars to people who need them. According to the calculation of TouBao Research Institute, based on the cost advantage, the price of P2P car rental is about 30%-50% cheaper than traditional car rental.

"Under this business model, P2P car rental platforms do not need to invest a large amount of money to purchase vehicles, which can greatly reduce operating costs; renters can also choose the rental period and type of car according to their own needs, which effectively improves the flexibility of car rental;

At the same time, P2P car rental, as a type of shared car, plays a positive role in promoting the development of the sharing economy. In general, this business model has the characteristics of low cost, strong flexibility and promotion of the sharing economy. "said TouBao Research Institute.

In 2014, a number of P2P car rental platforms emerged in China, including PP Car Rental, Aotu Car Rental, Baojia Car Rental, Youyou Car Rental, and Cocar, while overseas platforms included Turo, Getaround, and Zipcar. However, these players are still relatively scattered, with low market concentration and no obvious leading players.

Although there are many players in the online car rental industry, the bigger pie in the ocean is still offline. According to the report, the domestic car rental industry is currently less concentrated. Hundreds of thousands of car dealers make up the offline transaction market of the domestic car rental industry, accounting for about 65%, and the remaining 35% of the online transaction market share is made up of nearly 100 participants.

03. The car rental market is worth hundreds of billions of yuan, and industry standards continue to upgrade

According to Qichacha data, there are 1.0551 million car rental-related companies in my country. In 2020, the number of registered companies reached 255,200, an increase of 11.69% year-on-year, reaching the peak of registration volume in the past decade.

In terms of cities, Shanghai currently has 54,800 car rental-related companies, ranking first. Beijing and Shenzhen currently have 42,500 and 38,200 companies respectively, ranking the top three. Next are Guangzhou, Chengdu, Tianjin and other cities.

Image source: Qichacha

The reason behind the emergence of a large number of car rental companies is that the car rental market is growing. According to the New Era Cultural Tourism Research Institute, the domestic car rental market is expected to reach 300 billion yuan by 2030, with a compound annual growth rate of about 15%;

Among them, car rental for the purpose of tourism and related activities accounts for 1/3 of the overall car rental market. The scale of the domestic car rental and self-driving travel market is expected to reach 100 billion yuan in 2030, which is an important growth point for the car rental industry.

Wang Qian, an analyst at iResearch Consulting, pointed out that in the domestic car rental industry, more than 90% of the companies are relatively small in scale, and only about 20% of the market share is occupied by leading companies such as Shenzhou and eHi.

In addition, as the market expands rapidly, various problems are also becoming increasingly apparent; in order to quickly expand their business, some non-compliant companies have adopted unfair means to deceive consumers and even put unregistered vehicles into leasing operations.

These behaviors not only increase the safety risks of consumers' travel, but also disrupt the normal order of the car rental market and may even involve violations of relevant laws and regulations.

On Heimao Complaints, there were 90,000 complaints with "car rental" as the keyword, involving issues such as insurance denial, unclear quotations, and failed car pick-up.

Image source: Black Cat Complaint

To this end, relevant departments have introduced a series of support policies for the car rental industry and its supporting infrastructure construction.

In April 2021, the Ministry of Transport promulgated the "Management Measures for Small and Micro Passenger Car Rental Operation Services", requiring leasing operators to clearly inform lessees of matters such as service items, leasing procedures, types of leased vehicles, charging standards, deposit collection and refund, customer service and supervision telephone numbers, etc.

In August 2024, the State Council issued the "Opinions on Promoting the High-Quality Development of Service Consumption", which proposed to improve the quality of transportation services, improve three-dimensional transfer, car rental and other services, and facilitate passengers' travel.

An Guangyong, expert member of the Credit Management Committee of the All-China Mergers and Acquisitions Association, also gave suggestions from three aspects.

First, strengthening supervision and industry standardization is key. The government and industry associations should formulate and enforce strict quality standards and safety specifications to ensure that the vehicle conditions and service levels of car rental companies meet certain requirements and avoid sacrificing safety and quality due to price competition.

Secondly, promote technological innovation and improve service efficiency. Car rental companies can optimize fleet management and enhance customer service experience by applying technologies such as big data and artificial intelligence, thereby improving service quality while ensuring low prices. In addition, car rental companies are encouraged to develop self-service and contactless car rental processes to reduce human errors and safety hazards.

Third, strengthen the consumer rights protection mechanism. Set up a special complaint channel and a quick processing mechanism to ensure that consumers can get timely solutions when they encounter problems. At the same time, car rental companies should provide transparent pricing and terms to avoid hidden fees and unreasonable terms.

"Finally, we should promote the green development of the car rental industry. As environmental awareness increases, car rental companies should increase their investment in new energy vehicles and provide more environmentally friendly options. This is not only in line with future development trends, but also can attract more environmentally conscious consumers.

Through these measures, we can promote the high-quality development of the car rental market while maintaining market vitality, protect the legitimate rights and interests of consumers, and enhance the sustainability of the overall tourism industry." An Guangyong said.

Have you rented a car for the National Day this year? How did you feel? Feel free to leave a message below to share.

Author | Liu Qinwen‍‍‍ Editor | Fun Business Consumption Group This article is written by the operation author [Fun Business], WeChat public account: [Fun Business], original/authorized to be published on Operation Party, and any reproduction without permission is prohibited.

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