A strong demand to use cars during the seven-day Spring Festival holiday has boosted the business of car rental companies in Shanghai.

Shanghai-based Avis China, the 50-50 joint venture between the world's largest car rental firm and Shanghai Automotive Industry Sales Corp, said that all its 1,200 vehicles have been rented out for the holiday. Hertz China, another major car rental company in Shanghai, also reported that bullish demand has resulted in all its vehicles rented, although officials refused to reveal its fleet number.

"All the orders are long-term, most are for one week," said Li Ming, marketing manager of Avis China, which has more than 6,000 members in Shanghai.

"Most of our customers are individual clients," Li added.

For a customer renting a Shanghai General Motor's Sail sedan for seven days, Avis charges the user 250 yuan (US$30.12) per day.

The car rental business is partly a beneficiary of conflicting interest, industry insiders said.

More people received their driver's license and are able to afford cars in Shanghai but at the same time, the city government controls the number of auto plates issued in a bid to minimize traffic congestion and protect the environment.

For example, in the first half of last year, 91,000 people acquired driver's license while only 21,600 auto plates were issued in the same period in Shanghai. The number of private cars in Shanghai was expected to reach 200,000 by the end of last year.

At the same time, getting a taxi in the city has becoming increasingly difficult as cold weather and Spring Festival shopping nudged more people to take cabs. The number of trips made by taxis has risen 20 to 30 percent, according to the city taxi administrative authority.

"That (the difficulty in getting taxis) also made some drivers, who have licenses but do not own cars, to rent a car to use during the holiday at their convenience," said Li of Avis China.

Meanwhile, Li pointed out that response to the firm's new inter-city car rental service has been lukewarm. But he said the firm will continue to promote the inter-city rental concept in the local people's mind.

The inter-city car rental service aims to make it convenient for customers, who rent cars in one city, to drop it off in another.

Avis China opened its Suzhou branch in Jiangsu Province last month in an aim to promote its inter-city service.

It also plans to establish 70 branches in 26 cities in China by 2007.

(eastday.com January 21, 2004)