Automobile Leasing Industry Overview in China, 2011-2020

The competition pattern of automobile leasing industry is characterized by regional high concentration rate and scattered market share in China. For example, there are thousands of leasing enterprises in Shenzhen, but seldom large-scale ones. Presently, the overall market is highly fragmented. In terms of the category segments, short-term automobile leasing companies are the least in number but plenty in vehicles because they need large quantities of funds and network supporting; long-term auto leasing companies are the most in number but local and small in size so 80% of auto leasing companies operate in long-term business; financial automobile leasing companies mainly concentrate in the first and second tier cities in a small quantity.

Market demand of passenger vehicles can be divided into long-term leasing (over one year) and short-term leasing, which can be further divided into designated-driving and self-driving respectively in China.

The client groups of automobile leasing market are composed of enterprise users, official users and personal users. Most enterprise users rent automobiles for a long term. The leasing companies customize renting approaches based on various client needs and provide professional and efficient service. In recent years, government departments started to rent automobiles as well, which reduced the universal malpractices such as high maintaining costs, abuse and management disorder of existing government automobiles. On Jul. 16, 2014, General Office of the CPC Central Committee and General Office of the State Council issued Guidance on Comprehensively Push Forward the Reform of Official Vehicle-Using System and The Central and State Institutions Official Vehicle-Using System Reform Program respectively, which regulated to cancel the government automobile priority of those below the vice-ministerial positions and cancel general government automobiles to grant official transport subsidy moderately instead. This indicates that the government automobile leasing enterprises have a promising market and will develop rapidly.

According to market research by CRI, the total leasing automobiles available in leasing enterprises reached 410 thousand with a market size of about CNY 45.5 billion up to the end of 2015. The CAGR was about 20% from 2011 to 2015. The concentration rate of Top 5 enterprises in automobile leasing industry was less than 20% in China in 2015, which indicated that the market was still at the stage of free competition with many opportunities for new enterprises.