The Chinese market will exceed 100 billion yuan next year



The concept of car rental travel is deeply rooted in people's hearts, and the industry market size will exceed 100 billion

Due to multiple factors such as policy encouragement, consumption upgrading, and technology driving, the car rental market has ushered in multiple favorable developments. Especially in the post-epidemic era, people are more concerned about safe and private travel methods, and the concept of car rental has been deeply rooted in people's hearts.

From the perspective of user demand, in 2020, the number of car drivers in the country will reach 418 million, while the number of private cars will only be 244 million. The rapid increase in the number of people without cars, which will rise to 174 million by 2020, and the continued growth in the size of drivers, provide a user base for the rental car market.

From the perspective of vehicle supply, domestic car sales began to grow negatively in 2018. Affected by the deterioration of the market economic environment, the weakening of the awareness of vehicle privatization and the restriction of driving and licensing policies, car sales continue to decline, which brings opportunities for the growth of the rental car market. At the same time, it is worth noting that with the acceleration of vaccination across the country, China's tourism market has further recovered, and car rental self-driving Tours are also expected to further expand the scale of demand.

How big is the car rental market in China? Analysys data shows that China's car rental market has experienced an exploration period and a market start-up period, and is now entering a period of rapid development. In fact, in 2019, the size of China's car rental market has exceeded 90 billion yuan, but in 2020, due to the impact of the epidemic, the size of China's car rental market dropped to 65.327 billion yuan, down 29.3% year-on-year.

However, with the further control of the epidemic, the overall Chinese car rental market is ushering in a recovery. Analysys expects that in 2021, China's car rental market will reach 84.924 billion yuan, an increase of 32.8%. In 2022, the total size of China's car rental market will exceed 100 billion yuan, reaching 106.156 billion yuan, an increase of 25% year-on-year.

Individual users become an important engine for the recovery of the car rental market, and corporate users bring an important supplement to income

From the user level analysis, car rental users are divided into enterprise users and individual users. Among them, corporate users are the most traditional customer group in the car rental market, and individual users are the fastest growing customer group among car rental users, and they are also an important engine for the rapid recovery of the car rental market in the post-epidemic era.

Analysys data show that from 2020 to 2012, the number of active users in China's car rental market is about 10 million, although the growth rate has slowed down in the first half of the epidemic, but the free private advantage of car rental under the epidemic has led to the rapid recovery of car rental demand, and the first half of 2021 maintained double-digit year-on-year growth.

Individual users show three characteristics, first, users from the first-tier market to the second - and third-tier cities more extensive population expansion. In 2021, the number of users in second-tier and lower-tier cities in the car rental market increased by 24.6% compared to 2019. Taking the linkage cloud as an example, the proportion of users in low-line cities is the highest, reaching 51%. This year, Linkage Cloud has also opened business in Anshun, Guizhou, Beihai, Guangxi, Weiwu, Gansu, Wuhai, Inner Mongolia, Tengchong, Yunnan and other tourist cities, and deeply cultivated the sinking market.

Second, the trend of car rental users is younger, after 80, 90 become the main market. The proportion of post-90s users under the age of 30 of linkage cloud reached 66%, and the proportion of post-90s users of Ehi car rental also exceeded 50%. Third, for individual users, leisure travel and commuting are the most important service scenarios.

In terms of enterprise users, the expansion of car rental companies for enterprise business will help the landing of diversified scenarios. It is worth noting that the B-side market is an important supplement for shared travel enterprises to achieve revenue growth, and the overall trend is more extensive coverage of partners, more diversified cooperation scenarios, and higher service standards. Partners have also developed from early government vehicles, enterprise vehicles, and conference vehicles to industrial institutional collaboration and OTA collaboration. At the same time, the division of demand matching dimensions is more detailed and supporting operation and maintenance is more specialized.

The first echelon company three pillars, linkage cloud into a rising star

In the 100 billion level of China's car rental market, the three first echelon companies, China Car Rental, Ehi car rental and linkage cloud car rental, form a three-legged structure. Two or three echelon companies in the market also include Ctrip car rental, EVCARD, Gofun travel, Wukong car rental and so on.

Compared with the three car rental companies in the head, they have formed a certain city coverage and vehicle scale. It is understood that at present, China Car rental covers more than 300 cities, the fleet size of more than 150,000 vehicles. The linkage cloud covers more than 360 cities with a fleet size of 100,000 vehicles, while the linkage Cloud will also purchase 35,000 vehicles to expand the fleet. Ehi Car Rental covers 450 cities with a fleet size of 70,000 vehicles.

Founded in 2007, China Car Rental was listed on the Hong Kong stock exchange in 2014 and was privatized in 2021. Ehi Car Rental was founded in 2006 and listed on the New York Stock Exchange in 2014. However, since the listing, the company's market value has been undervalued by the US stock market for a long time, and Ehi Car Rental has also announced plans to land on the Hong Kong Stock Exchange.

Different from China Car Rental and Ehi Car Rental, which have been established for more than ten years and have had capital market experience, Linkage Cloud, which also occupies the first echelon position in the car rental market, was established only five years ago.

"When the traditional car rental platform has a certain brand and scale, as a later entrant in the industry, if you still imitate and follow, there is no way out!" Che Xinli, president of Linkage Cloud, said, "The market environment at that time decided that we must go out of our own way."

From the perspective of the global market, the car rental industry is characterized by "heavy assets, light profits", the traditional business model does not have much imagination, and the sharing of cars that were booming at that time let the linkage cloud see the opportunity. This will make the consumption frequency greatly increased, and through this high-frequency consumption entrance can be extended to the entire automobile ecological chain, extending a variety of business forms closely related to automobiles. According to this, Che Xinli put forward the strategic concept of "car rental first, ecological encirclement".

In this Analysys data report, it also restores the development path of linkage cloud for more than 4 years: When linkage cloud was established in 2016, it chose to build its own science and technology team; In 2017, we explored a new model of car rental and laid out the after-car service market. In 2018, it entered 100 cities and launched auto financial products. So far, Linkage Cloud has been stationed in more than 360 cities and innovated local life services.

At the same time, it is worth noting that in terms of urban expansion strategy, linkage Cloud made the development strategy of entering the sinking market first in 2016. Car Xinli previously told the 21st Century Business News that the user demand in second-tier to fifth-tier cities is actually very large, due to the density characteristics of the network, in fact, the sinking market of car orders, daily orders of bicycles and other consumption toughness.

After accumulating experience and user base in the sinking market, linkage Cloud began to enter first-tier cities such as Guangzhou and Shenzhen in 2018. From the sinking market to the first-tier cities, the linkage cloud has also been upgraded to a certain extent.

It is understood that the travel market of second-tier to fifth-tier cities is easy to reach saturation, but in first-tier cities such as Guangzhou, Shenzhen, Shanghai and Beijing, travel demand is greater, and entry costs will be higher. In the absence of a license plate reserve, the linkage cloud entered the market with the help of social vehicles. In addition to self-operated vehicles, Linkage Cloud has opened a third-party vehicle access mode, and private owners and enterprises with vehicles in Beijing and Shanghai can access the linkage cloud car rental platform to revitalize idle travel resources.

Car rental market in the future four major development trends to focus on

At the end of the analysis report, Analysys also forecasts the development trend of China's car rental market.

First of all, minimalist, personalized needs to activate the car rental market more long tail products to promote market growth. At present, the post-60 group has gradually entered the state of retirement, as consumers with money and leisure, many post-60 choose to rent RV travel to start retirement life. Rv and SUVs have become popular choices for elderly people to rent cars, while young users prefer sports cars, luxury models, SUVs and other models. At the same time, for business users and daily car rental users, their needs have a short, minimalist characteristics.

Second, in-line services and post-line services will gradually expand to help enterprises tap more value from users. For car rental platforms, revenue will not only come from vehicle rental, in-line and post-line services also contribute more revenue sources. For example, when users rent a car on a road trip, based on car networking and big data, accurate destination activities can be recommended for users. At the same time, advertising/service recommendation can be carried out in the body, inside the car and APP, and relevant businesses can achieve cross-border diversion, resulting in actual economic benefits.

Third, the technology and landing of car networking and intelligent driving have been effectively improved, which is expected to achieve the "double value" of the platform and users. For example, with the further improvement of the penetration rate of car networking, it can help to ensure the condition of the car before rental, monitor the situation during rental, and check the damage after rental. For the platform, the Internet of cars replaces the manual control of the whole process before, during and after the rental of cars. For users, the whole process monitoring of the Internet of vehicles can also ensure the safety of users.

At the same time, the reliability of intelligent driving technology has been greatly improved, and advanced driving assistance functions are constantly improving. For the platform, vehicle accidents and parking accidents can be reduced, and users can also improve the driving experience and optimize the parking experience.

Fourth, the industry breaks through the early stage to the future, and the horizontal and vertical industrial ecological combination derived from car rental is the trend. From the horizontal point of view, the industrial ecology involved in car rental travel includes catering, accommodation, shopping and so on. According to the user portrait and behavioral preferences, combined with regional and scene attributes, it can expand the refined operation of the horizontal industrial ecology and stimulate the secondary and multiple consumption of the rental car stock.

Taking Linkage Cloud as an example, the company has more than 30,000 outlets in the country, and it is estimated that there are nearly 5 million businesses around 500 meters (such as eating, drinking, entertainment, attractions, etc.). "Through the identification of user consumption behavior and cooperation with businesses, the merchant information around the network is selected, and the good things are recommended to users in a timely manner, which is a very scene-oriented service model." Che Xinli once told the 21st Century Business Herald.

From a vertical point of view, the industrial ecology involved in car rental includes used cars, auto finance, auto insurance, auto refueling, etc., which also has great value for the platform and users. Also taking linkage Cloud as an example, the company has covered related businesses in the fields of new automotive retail, after-car service, and used cars. Among them, in the after-car service market, linkage Cloud has formed 600 franchise flagship stores through the offline franchise system, and achieved 6 self-built factories.