China Auto signs strategic alliance
Updated: 2013-04-18 10:32
By Li Fangfang and Cai Xiao (China Daily)
A Hertz Global Holding Inc stand at an expo in Beijing. China's car-leasing market is expected to grow from $2.5 billion in 2010 to $6.1 billion in 2015, according to figures from Roland Berger Strategy Consultants. [Provided to China Daily]
Global giant Hertz takes 20% stake in leading leasing company
China Auto Rental Holdings Inc, the largest player in the country's booming vehicle leasing market, has signed an alliance with one of the world's biggest operators, Hertz Global Holdings Inc.
Hertz will acquire a 20 percent stake in the Beijing-based company as well a seat on its board, and in exchange, China Auto will take over Hertz's car rental operations in China, under an initial five-year license.
The two companies will also become exclusive car rental co-brand partners for inbound and international business, offering corporate and leisure travelers short- and long-term rental services.
Both sides refused to disclose financial details of the deal.
China Auto Rental previously had plans for an IPO on the Nasdaq in 2012, but canceled those due to a low initial offering price.
But Liu Erhai, a managing director of Legend Capital and a director at China Auto, told China Daily that the investment will not have any impact on its plans to list on Nasdaq.
"Financing is important for the sector because buying cars requires funds," Liu said.
"Few Chinese companies are currently interested in being listed in the United States after a series of short selling on Chinese companies there.
"We will still consider getting listed overseas when market conditions improve," he said.
Mark P. Frissora, chairman and CEO of Hertz, said: "As the leading global car rental brand, it's a perfect fit for Hertz to partner with the largest and most recognized car rental firm in China."