Golden Week holiday spurs car-rental frenzy

China's fledging car rental industry will get a boost over the longer-than-usual October holiday because of a new policy lifting highway tolls during major festivals.

Car rental firms are seeing their orders pile up ahead of the eight-day Golden Week holiday, with demand outstripping supply in key cities.

China Auto Rental Holdings, a car rental service with headquarters in Beijing, started accepting orders for the National Day holiday on Aug 1, and more than 60 percent of its 35,000-car fleet had been booked by the end of last week, said company spokesman Zhou Jianfeng.

"The traditional peak period is the last week of September, but this year, business has been brisk since the beginning of the month. It's safe to say that the cancelation of highway tolls is the key reason," he told China Daily.

To ride the rental boom, the company has waived mileage restrictions for users in certain areas, but the minimum number of days to rent a car during the upcoming holiday has been lengthened to four days, up from the usual one day.

The government recently announced that cars with seven seats or less are exempt from highway tolls during four Chinese holidays — Spring Festival, Tomb Sweeping Day, May Day and the National Day.

The country's 236 million licensed drivers will save up to 10 billion yuan ($1.58 billion) in highway fees during one of China's longest-ever Golden Week holidays, which runs from Sept 30 to Oct 7 this year, according to Xinhua News Agency.

Customers are being drawn to family-sized cars, which accommodate more people, according to Shao Wei, public relations director of Shanghai-based car rental company eHi Auto Services.

The company reported robust sales during the pre-holiday period, with two-thirds of its cars already rented. The company's most popular models are SUVs that seat up to seven people, which cost an average 660 yuan a day plus 40 yuan a day for insurance.

Business clients are increasingly adopting car rental as a cost-saving alternative for high-profile executives and guests.

At Dazhong Car Rental and Leasing, which targets corporate clients, all 4,000 cars have been booked well in advance of the upcoming holiday, said public relations officer Ren Shen.

But prices are surging as people snap up the vehicles. EHi said its prices are on average 30 percent higher than usual, and at China Auto Rental the price on Oct 1 is twice that of workdays.

Tao Weishuo, 30, who lives in Shanghai, plans to rent a car in Hefei, Anhui province, to visit his fiancee.

A veteran driver, he still decided to take the high-speed train from Shanghai and rent a car next to the local train station.

"The lifting of tolls is beneficial to drivers, but it might spur unprecedented road traffic. The train-plus-car-renting plan is a good combination that saves effort and money at the same time," he said.