The outbreak of COVID-19 and the implementation of different stages of lockdown and restrictions on travel from January 2020 onwards led to a sharp decline in total traffic, hitting the car rental category hard. The imposition of restrictions during the Lunar New Year festival season, a high-point for travel in the country and one of the key contributors to cash flow for car rental companies, had a particularly marked negative impact in 2020.
The Chinese car rental market is highly fragmented and characterised by huge numbers of operators. As such it is extremely competitive.
In the past, most car rental players have developed their own independent mobile apps where travellers need to download the app to rent a car. However, consumer loyalty to these apps is very low and it is not convenient for users to register and rent cars as most use them for the first time or only when they have demand.
Boosted by the global health crisis and the fact that the virus remains on hard surfaces for long periods from where it can easily be transmitted, the concept of contactless payments has become a much more important part of daily life. As a result, contactless car rental mode is expected to play an important role in the industry’s development in the wake of the pandemic.
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Car rental covers the short-term rental of passenger vehicles for self-drive by both business and leisure users, whether from the airport or downtown locations. Trucks and commercial vans are excluded. Car rental value covers the price of car hire to the consumer. Ancillary revenues are included, such as the hire of baby car seats, GPS navigation systems, optional roadside assistance services and collision and damage waivers. Volume is provided by the number of car hire transactions, fleet size and number of car rental operators. In underdeveloped markets, car rental companies offer chauffeur-driven cars. Most people prefer these options, due to unfamiliarity with the roads. Euromonitor International includes chauffeur-driven cars in car rental, when they concern car rental companies such as Hertz or Avis, which offer a chauffeur-driven service as an additional option. Car rental covers sales to inbound tourists and domestic tourists. i.e. from a destination point of view (also known as point of supply). For example, if a US citizen books a car rental service in France via the US offices of Hertz, the sales are attributed to Hertz France. The same applies for online sales. Car rental excludes long-term leasing, commercial vehicles, trucks and motorbikes and local car sharing schemes.
See All of Our DefinitionsThis report originates from Passport, our Car Rental (Destination) research and analysis database.
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