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Car-sharing set to drive future travel in China

04/18/2016| 9:44:49 AM|

Ownership of vehicles loses attraction for customers amid the sharing economy of transport in China

Motoring experts expect emerging transportation-sharing services to create new opportunities and foresee great leaps in the near future, while Chinese customers' preference for short trips is car-hailing services with a private driver.

The Boston Consulting Group predicted that about 600,000 vehicles would generate 80 billion yuan ($12.34 billion) in added value in China by 2021, through new mobility services including long- and short-term rentals, and short trips with private drivers.

BCG said the appeal of private car ownership is weakening among the young in large Chinese cities, and customers will find various ways, including car-sharing services, to meet their mobility demands.

Long- or short-term car rentals enable customers to use vehicle they do not own. The users bypass the upfront costs of a car, and the greater costs that come with ownership, especially plate costs.

The Nielson Company Greater China found that ride-sharing through car hailing services reduces fares for passengers, lowers the frequency of driving private cars and weakens the users' desire to own private cars.

The research report published in February showed that 19 percent of the 4,000 car-hailing service users surveyed utilize ride-sharing services.

Founder and CEO of Yidao Yongche, Zhou Hang, expects private transportation, which accounts for 30 percent of Chinese traffic, to be shared among users of emerging mobility service users.

Chinese car rental company CAR Inc. operates the largest fleet in the country with 83,168 vehicles at the end of 2015, compared with 58,773 vehicles in 2014. However, all of the company's fleet is not available for timesharing, and the shortest billing cycle is on a daily basis, and customers must visit a station to pick up and drop off cars.

There are car manufacturers tapping the timeshare business in China, including BMW AG, Daimler AG and Toyota Motor, all of which have been running car-sharing projects worldwide including on the Chinese mainland, with individual fleets of several hundreds of vehicles.

New-energy carmaker BYD Motors announced in March it is starting a new-energy car timeshare rental business through a joint venture with Didi, a car-hailing platform.

Nielson summarized that 67.8 percent of respondents who do not own cars "feel there's no need for a private car."

Moreover, 32.4 percent of private cars owners surveyed said they wouldn't buy another car and 9.7 percent were considering selling their cars, according to Nielson.

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TAGS: car rentals | car-hailing | Yidao Yongche | transport
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