Global car leasing giant, Hertz, has acquired a 20% stake in China’s leading rental firm.
China Auto Rental office Image:China.org.ca
China Auto Rental Holdings has formed a strategic alliance with Hertz Global to help expand its share in the booming rental market.
Hertz will take a 20% stake in the Beijing-based company, and China Auto will take over Hertz’s existing car rental operations across the country. Both parties were coy about the financial details of the deal.
China Auto’s IPO plans were cancelled in 2012 due to a low initial offering price. However, a company director, Liu Erhai, claims the rental firm is still considering an overseas listing when “market conditions improve.”
Liu claims: “financing is important for the sector because buying cars requires funds” and he expects the company’s fleet to grow to 100,000 units by 2015.
China’s rental market was worth $2.5 billion in 2010 and is expected to grow to more than $6 billion by 2015. China Auto’s own growth, of 200% during the 2009-2012 period, outstripped the market six-fold. China Auto has the lion’s share of the Chinese market, with more than quadruple the amount of cars compared to its next biggest competitor.