CAR Inc signs purchase deal with VW to enlarge fleet
CAR Inc has signed an agreement to purchase 100,000 cars for at least RMB10 billion from Shanghai Volkswagen over the next three years.
After burning through RMB2.5 billion (approx:US$404 million) to enter the chauffeur segment in January this year, CAR Inc has signed an agreement to purchase 100,000 cars for at least RMB10 billion (approx:US$1.6 billion) from Shanghai Volkswagen over the next three years.
According to the agreement, CAR Inc will enjoy preferential pricing on the vehicles and additional services including car financing, after-sale service and buy-back. Both sides will also cooperate in joint customer market promotions, advertising on their official websites and linked loyalty programs.
A CAR Inc spokesperson said this purchase will add to its rental car fleet as well as its chauffer motor pool, to meet the huge potential and rapid expansion of the chauffeur market.
CAR Inc has a fleet of 63,522 vehicles, the largest in China, operated by 700 directly managed rental agencies in 70 cities in China as of the end of 2014. Its chauffeur service launched in January this year covers 60 cities in China.
CAR Inc isn’t the only one joining forces with car manufacturers. Major car hire players Uber and Yongche are also partnering with car makers to bolster their vehicle resources. Uber and Chinese automaker Yongda Auto signed a strategic partnership for the Chinese market on March 18 this year.
Under the agreement, Yongda Auto will be Uber’s supplier for cars, after-sale service, and financing and loans. Yongda Auto’s president Xue Yu said: “We have already reached an initial agreement on the sale of Audi and Volkswagen vehicles and the initial payment will reach several million yuan.”
Yongche and Haier Financial Services announced on January 18 they had formed a joint venture car rental service called Haier Yongche Travel. Next, Yongche announced on April 19 an agreement with Honda to use hybrid car Prius on its car rental platform. Yongche introduced thousands of new energy vehicles – including Prius, Volvo S60L, BAIC Motor Corp EV Series and Teslas cars – to its services in Beijing, Shanghai, Guangzhou and Shenzhen.
Yongche’s president Xulei Hu said Haier Yongche Travel is a heavy-asset car rental company with the required business licenses and resources. Thus Yongche is forming partnerships with suppliers like Honda to build up the motor pool. “Yongche provides the platform and services while Haier Yongche Travel holds assets and completes the O2O transition of our service,“ he said.(Translation by David)