Shouqi Car Rental Co., Ltd. (“Shouqi Car Rental” or “Shouqi”), a Beijing-based mobility service provider, announced on December 26 that it had completed A+ and B rounds of financing in a transaction worth RMB 2.15 billion. Investors were a consortium led by Taiping Asset Management Co., Ltd., together with Tianan Property Insurance Co., Ltd., Zimu (Beijing) Fund Management Co., Ltd. and CCB International. The sheer size of the investment reflected the considerable confidence that the investors placed in the brand value, resources and prospects of Shouqi Car Rental. A source from the car rental agency said that the proceeds from the funding rounds would be used for vehicle procurement, market development, technology R&D and resource integration.
Beijing Shouqi (Group) Co., Ltd., the controlling shareholder of Shouqi Car Rental, is the successor of Capital Automobile, a company personally named by China’s first Premier Zhou Enlai and incorporated in 1951. Shouqi Car Rental was founded in 1992 as one of the first car rental businesses in China and has since maintained its leading position in China’s car rental market. In July 2014, the company launched its plan to restructure itself by taking an international, Internet & market-oriented approach and quickly reshaping its business around the real economy, Internet and capital.
From its inception in 1992 as a pioneer to its reshaping in 2014, Shouqi Car Rental has witnessed the ups and downs of China’s car rental sector better than any other peers. Today, it has become one of the top 3 players in the market in terms of market share, owing and operating a fleet of 30,000+ vehicles in a network of nearly 500 outlets across more than 70 Chinese cities.
In early 2015, Shouqi Car Rental secured an inaugural fund of RMB 900 million from its holding companies (Shouqi Group and Beijing Tourism Group). By July 2015, it had successively taken out credit lines with six major Chinese banks, which added up to RMB 27 billion. In October, the company secured a strategic investment of RMB 800 million from Harvest Fund Management Co., Ltd. in the A round of financing. Within just a little more than a year, Shouqi successfully made it into the first echelon in the Chinese car rental market, along with CAR Inc. (formerly China Auto Rental Inc.) and eHi Car Services.
While continuing to focus on the quality of services, meticulous management and fleet operations & management amid new challenges, Shouqi Car Rental spares no effort to develop its business horizontally and vertically towards a clear strategic direction.
In February 14, 2016, Shouqi Car Rental became the largest shareholder of ReoCar. The merger considerably enhanced Shouqi’s strategic presence in the northern and southern parts of China. In April 2016, Shouqi Car Rental unveiled its “All－round Mobility” strategy in an industry report jointly published with Roland Berger, a Munich-based consulting firm. Under the “All－round Mobility” strategy, Shouqi commits itself to providing customers with one-stop, nationwide mobility service solutions that cover mobility, travel, accommodation and entertainment along the route of travel of the customers. In the second half of 2016, Shouqi successively entered into strategic partnership with such key travel, transportation or hospitality players as Homeinns Hotel Group, China Comfort Travel Group and China Railway Customer Service Center (12306.cn). Built on the Business to Business to Consumer (B2B2C) model, Shouqi is making greater efforts to expand its presence in the enterprise car rental market and provide one-stop solutions to the reform of government-owned motor vehicles.
The current rounds of financing will further strengthen Shouqi’s ability to integrate resources inside and outside the car rental industry and to forge synergies with Shouqi Limousine and Chauffeur and NEV Car－Sharing（GoFun）, another two mobility service providers affiliated with Beijing Shouqi Group. The move will surely enable Shouqi Car Rental to enrich its mobility offerings and boost the growth of China’s car rental sector as a whole.
Backed by the Group’s resources, operational strength and fleet management capability, Shouqi Car Rental has created an ecosystem of mobility services that cater to various mobility needs. By initiating internal change and optimization, Shouqi Car Rental is in a better position to integrate resources both horizontally and vertically. By creating the ecosystem of mobility services, it is able to engage in new revenue-generating activities that are necessary to drive its growth towards an ever competitive market. The transformation seen in asset-intensive Shouqi is expected to leverage up the economy of its scale.
China cars booking and rental market analysis report published by Roland Berger in 2016 revealed that the car rental demand in China was far from being met and that despite the size of the market, gaps and flaws existed. Compared with foreign markets, China’s car rental market is still quite young. Much has yet to be done about market regulation and the market is still far from being mature. It is believed that the efforts and practices of such industry leaders as Shouqi and CAR Inc. will boost China’s car rental market and help to establish industry standards for more convenient, higher quality mobility services that will benefit the public.
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