Car Rental Companies

Car rental companies refer to legally incorporated business entities engaged in small and micro passenger car rental services or automotive financial leasing operations. Utilizing vehicles as service assets, car rental companies meet the diverse mobility requirements of individuals and corporate clients by granting vehicle usage rights over a designated tenure in exchange for rental fees. As self-drive travel becomes a mainstream preference and consumer mindset shifts from "ownership" to "usage", the car rental sector is evolving from a seasonal, tourism-dependent niche into a high-frequency daily mobility solution, anchoring an essential segment within the automotive aftermarket.

Business Types

Car rental companies are primarily categorised into two operational models based on business nature: operating leases and financial leases.

Operating leases represent traditional car rental services, where leasing firms rent company-owned vehicles to hirers for scheduled rental payments, with the vehicle returned upon contract expiry. Operating leases are further divided by rental duration into short-term rentals and long-term leases. Short-term rental is currently the most prevalent format, billed on a daily basis to cater to holiday road trips, corporate travel, and vehicle test drives; long-term leasing targets corporate clients requiring extended fleet use—typically exceeding one year—complete with structured fleet management services. The sector has expanded from a niche mobility service into a key mass-market industry, with approximately one million short-term rental vehicles generating around RM38,000,000,000 in annual market revenue.

Financial leases are asset-backed financing solutions where the leasing company leases vehicles long-term to clients against monthly instalments, transferring vehicle ownership to the client upon the conclusion of the lease tenure. This structure lowers upfront vehicle purchase barriers, making it particularly attractive to corporate fleets and younger buyers. Ping An Leasing represents a flagship player in this segment; by the end of 2025, its automotive financial leasing operations had cumulatively deployed over RM430,000,000,000, with an asset base surpassing RM100,000,000,000 and a customer base exceeding 3.5 million clients.

Market Landscape

The Chinese car rental market has established a well-defined competitive landscape. Nationwide chain giants CAR Inc. and eHi Car Services form a duopoly, commanding a combined market share of roughly 40% to 50%. CAR Inc. operates a fleet of around 150,000 vehicles spanning over 340 cities and more than 6,600 directly operated outlets nationwide, serving over 160 million registered users. Similarly, eHi Car Services has established an extensive service network across more than 500 cities, pioneering complimentary intercity vehicle return services.

Beyond the market leaders, industry participants also include OEM-backed leasing operators (such as Dongfeng Nissan e-Rental and FAW Mobility), dealership-backed leasing firms (such as Grand Automotive Leasing), alongside numerous regional small and medium-sized operators. As of year-end 2025, China's total rental fleet of small and micro passenger cars reached approximately 4 million units, reflecting rapid sector expansion.

Industry Trends

Fleet electrification stands as the industry's most prominent current trend. In 2024, new energy vehicle (NEV) adoption within rental fleets approached 20%, with projections to exceed 50% by 2028. Running cost efficiency is the key catalyst—taking an RM150,000-class model as an example, energy costs over 3 years and 100,000 km come to roughly RM15,000 in electricity for an NEV, significantly lower than the RM60,000 petrol bill for an internal combustion vehicle. NEVs have gained wide popularity for short-distance trips, city driving, and weekend getaways, though long-distance journeys still face charging convenience constraints.

Digitalisation and standardisation are progressing concurrently. In 2026, ten government bodies, including the Ministry of Transport, jointly published the "Three-Year Action Plan for Promoting High-Quality Development of Small and Micro Passenger Vehicle Leasing (2026–2028)", targeting the establishment of an accessible, efficient, secure, and high-standard service network by 2028. The framework details initiatives to expand rental coverage at transport hubs, promote complimentary intercity vehicle drop-offs, and implement "single-point filing with province-wide validity" for rental fleets. Meanwhile, the national standard "Specifications for Automobile Rental Services", enforced since November 2025, sets forth clear requirements governing contract execution, vehicle inspection, deposit management, and service quality appraisal.

Throughout the "15th Five-Year Plan" period, the national short-term car rental market is anticipated to deliver an average annual growth rate of roughly 15%. Car rental is actively shifting from an "interim alternative" to a "daily mobility staple", cementing its role within the integrated transport framework and automotive aftermarket consumption.