UCAR looks to take on Didi with inclusive car services

Updated 2017-12-19 11:00:18 China Daily

Beijing-based UCAR Inc is setting up a comprehensive car service platform as part of a strategic upgrade that the car-rental company expects will help it better compete with other market leaders such as Didi Chuxing.

The upgrade includes the integration of its existing products such as car purchases, car leasing, car rentals and limousine cars and also the merger of its online and offline services.

"Changes in consumption and improvement of technologies are helping the company to forge a complete vehicle ecosystem, that will offer integrated services to car owners and provide access to people without cars," said Lu Zhengyao, chairman and CEO of UCAR.

Industry experts said the traditional car-rental company is branching out its services in more directions to cater to the diversified demands of users and gather more resources.

UCAR currently operates four main product lines: Car Inc, its Hong Kong-listed car rental arm, Shenzhou Zhuanche, chauffeured car services, as well as an online car marketplace and a car loan service.

"For a company, its ability to offer a more convenient and comfortable experience, especially in different scenarios, can help to decide if it could lead the Chinese car-rental market," said Zhang Xu, an independent internet industry analyst. "UCAR is doing quite well in its various niches and the business consolidation is a looking-ahead adjustment."

Zhang said that UCAR's transformation is in accordance with Didi as Didi is making available facilities like car rentals, and new energy vehicles as well as second-hand cars.

Wang Xiaofeng, a senior analyst with research firm Forrester, said: "Unlike Didi, UCAR is an asset-heavy enterprise that is competitive in terms of its numerous offline branches across the nation as well as its big fleet."

As of now, UCAR's car-rental arm Car Inc has gathered over 100,000 vehicles in more than 300 cities across China. Car Inc reported that its revenue rose 22 percent year-on-year to 3.61 billion yuan (6 million) in the first half of this year.

While UCAR has an in-house fleet and licensed drivers, which is a way to potentially increase margins and also, importantly, avoid government concerns around its legal status, Didi relies on private cars and crowd-sourced drivers.

"However, Didi Chuxing has a huge number of users across different platforms. Given that users hail a taxi more frequently than renting a car, customers may be more attracted to Didi services," she said.

Wang also noted that though most customers downloaded the apps of various companies, they choose them based on specific cases, be it discounts or improved experiences.

"Supply still falls short of demand in China's car-rental market and it suits companies to be customer-oriented. Those that provide more resources with less costs will become competitive and the ones that offer better services will be used by customers," she added.

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