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Report says rapid growth will see 170,000 vehicles in service by 2020

By Li Fusheng | China Daily | Updated: 2017-03-09 07:45

Car-sharing services will see fast growth in China in coming years, and the fleets of such service providers are expected to reach a collective 170,000 cars by 2020, according to a report by Strategy&, a subsidiary of PricewaterhouseCoopers.

The figure represents more than 50 percent annual growth from about 30,000 cars in early 2016.

A Strategy& survey showed that 75 percent of users would like to use more of the service while 77 percent of those who have not used the service yet, would like to give it a try.

The consulting firm said car-sharing services can help meet Chinese people's growing demand for convenient and quick urban mobility, especially in large cities where car license plates are controlled by strict quotas.

The Ministry of Public Security data shows that 310 million people in China hold a driving license. Yet, the number of cars in the country is around 194 million.

"In a sense, all those people who don't have a car are potential customers of car-sharing services," said Bill Peng, a partner with Strategy&, co-author of the report.

A car ride of a service provider on average costs less than 30 yuan an hour. So, sharing a car is more economical than owning one, be it a new or used vehicle, if one drives less than 5,600 km a year, the report said.

A 2016 study by China's State Information Center showed that a shared car can cut 13 car purchases.

Strategy& said restrictions imposed on ride-sharing platforms including Didi Chuxing in major cities like Beijing and Shanghai, and government's advocacy of green transport, will also boost car-sharing services.

It further said 95 percent of the cars shared now are new energy vehicles, and 77 percent of them are operated by automaker-backed car ride providers.

So, it expects automakers to continue to expand such providers' fleets to boost sales of their own new energy cars, now that China has set a goal of selling 2 million such cars annually 2020 onwards.

Things are moving in that direction already. For instance, Lifan Motors has added 1,100 electric cars to its existing fleet in Chongqing for car-sharing services.

Despite the bullish prospects, almost all car ride providers' books remain in the red, with each car losing 50 yuan to 120 yuan a day, according to Strategy&.

Gao Yu, vice-president of Lifan Motors, said car-sharing, like any business, needs time and scale to make money.

Peng at Strategy& suggested that companies keen to stand out from competitors are preparing for the long haul by securing adequate number of license plates, parking lots and charging posts.

"Competition will become even fiercer in two years as car-sharing services will gradually expand into smaller cities, and the segment, after rounds of mergers and acquisitions, will see three to four dominant companies," said Peng.

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