China's online car rental market has entered an outbreak

Following China’s car rental on the Hong Kong Stock Exchange, another car rental giant has applied for a US$200 million US dollar to apply for listing in the United States. According to iResearch's statistics, China's online car rental market has entered an outbreak period. In 2013, the market transaction scale reached 3.42 billion yuan, a year-on-year increase of 69.5%, and it is expected that the growth rate will exceed 20% in the next four years.

Although both companies are testing water overseas, the profitability of the two companies is not optimistic. According to the prospectus of a rental car, the financial performance has steadily increased in the past three years. Although losses have been recorded in 2012 and 2013 and in the first half of 2014, the amount of losses has narrowed. China Car Rental also suffered losses in both 2012 and 2013, but achieved profitability in the first half of 2014.

Market participants estimate that after a successful US listing, the market value will probably be between 500 million and 700 million U.S. dollars. However, the traditional car rental companies represented by China and Yilan all face the challenge of Internet rental companies. New car rental platforms such as PP Car Rental and Easy Access Vehicle attract private cars to join in the light asset mode, although they are playing in the policy of playing football. In the grey area, the market impact can not be ignored.