Produced by | Tiger Sniff Business Group

Author | Li Ling

It’s been a week since Ruixing’s fraud, and the butterfly effect hasn’t stopped. The stock price of car rental in China hovered around 2 Hong Kong dollars, and the car rental industry is also brewing a new pattern change.

On April 8th, Wu Xu, co-founder and CMO of Wukong Travel, told Tiger Sniff that Wukong had recently obtained an exclusive brand license in China for the international chain car rental brand Avis. An internationally standardized car rental service system is currently being built, and the domestic business of Avis Car Rental will be launched in July. The closeness of cooperation between the two parties is second only to the joint venture model.

The users of Wukong’s car rental platform tend to be younger, and the majority of self-driving tours are used. Avis enjoys a high reputation in the commercial vehicle market, and its audience tends to be high-end individuals and enterprises. Joining the mid-to-high-end car rental business like Avis, just complements the blank market for corporate and personal business vehicles that Wukong travels.

But the situation becomes complicated. On the evening of April 9, Shenzhen Report claimed , Ctrip is negotiating the acquisition of Shenzhou car rental, the integration of Yihe car rental business, and expanding the Ctrip car rental platform. From the perspective of current users of Shenzhou car rental and Yihai car rental, the former is mainly for individuals, and the latter is focused on conferences and corporate cars. The two businesses complement each other.

An industry insider told Tiger Sniff, “This is normal, and Ctrip’s previous attempt to acquire Yihe was unsuccessful. China is now cheap, and Ctrip is expected to do it.”

In terms of car ownership, the top three names of Chinese car rental companies are Shenzhou Car Rental, Yihe Car Rental, and Wukong Car Rental. Regardless of whether the car rental in Shenzhou is acquired or not, Wukong Travel’s marriage with the international car rental giant Avis is enough to change the current pattern of the car rental market.

Amphis united with Wukong travel

China ’s travel sector is considered to have a trillion market size. The industry generally divides the market into instant travel and scheduled travel. The former corresponds to online car-hailing platforms such as Didi, and the latter corresponds toCar rental platforms such as Shenzhou and Wukong.

Under the epidemic, the long-term and short-term rental and corporate car markets in the field of car rental have been opened up, making the service of car rental platforms more subdivided.

The business of Wukong travel includes self-driving car rental, vehicle collection, vehicle aftermarket service, etc. The addition of Avis actually added a brand in the field of car rental for Wukong travel, complementing the personalized and younger user group of Wukong car rental.

Avis is the second-largest car rental company in the world, with a market value second only to Hertz, which currently has approximately 660,000 vehicles. It has a high reputation among global corporate customers, and there are many orders from multinational companies worldwide, such as IBM, Apple, and Emirates. In the personal long-term and short-term rental business and the enterprise’s long-term and short-term rental business, Wukong Car Rental lacks the latter: there is no visibility among corporate customers, especially joint ventures.

Both are affiliate models, but the format is very different. Goku’s franchise model is similar to platform franchise, and Avis’s franchise model is similar to brand franchise.

Joining Avis needs to comply with its globally uniform vehicle and store service standards. The services of franchisees must be fully standardized, and the storefront must also change its head in accordance with international standards, unify dress, and provide globally unified services with processes and details.

Under Wukong’s franchise mode, the platform only serves as one of the diversion platforms, and there is no need to “bring up” franchise stores. In other words, franchisees bear their own profits and losses, and bear the cost of stores, personnel, and operation and maintenance. “As long as I bring more than 30% of the order increments of his stores, he (the franchisee) is already very satisfied.” Zhu Xu said.

Why attract suppliers to join in such severe conditions?

The general rule of business development is that large brands continue to annex small brands. The latter has no brand awareness and it is difficult to obtain a stable passenger flow. Car rental companies also face this problem.

Not only small and medium-sized car rental companies, some large and medium-sized car rental companies with hundreds of vehicles have such problems. Under the well-known brands of China and Shouqi, small companies are basically not competitive. The single-store model is difficult to survive. Car rental companies need brand blessing to form a branded and standardized service that more and more individuals and corporate customers need.

Zhu Xu revealed, “Before the announcement of the cooperation with Avis, there were already many olfactory car rental companies who came to us to seek cooperation. They were the Chinese suppliers of Avis before.” Franchisees not only have diversion orders, but also have strong brand endorsement and influence.

The current market size of the enterprise car market is between 60 billion and 80 billion, which may increase in the next three to five yearsUp to 100 billion.

Shenzhou car rental is mainly individual users. Yihe car rental focuses on meeting and corporate car use, and Avis ’s advantage in foreign-funded enterprises, that is, high-end customers, is the key to Wukong car rental gap in the market segment. .

A new industry pattern is brewing.

Shenzhou car rental was bottomed out?

If Shenzhou Rent-a-Car and Yihe Rent-a-Car are finally integrated, Wukong Travel will face Ctrip’s big travel, and variables will follow.

According to the Financial Times, in order to minimize the involvement of Ruixing ’s counterfeiting incidents, Lu Zhengyao may consider resigning from the post of chairman of the China Car Rental. No one can be sure when investors’ trust in the “China Department” will be restored.

“This is indeed a bargain-hunting. Now the stock of car rental in China has fallen into a trough. There is cash in the Ctrip account, the stock is worth the money, and the equity plus cash can get it. So the acquisition may not really be possible.” The above-mentioned industry sources said that Ctrip’s acquisition of car rental in China is sufficiently reasonable.

He believes that the integration of the two is a stock merger, and no new competitors have emerged. In addition, Yi Hi Car Rental has always been a platform for Ctrip diversion, and its business has not developed by leaps and bounds. The merger of Ctrip and Yihai has made the current business ideas of the head car rental platform similar, which has instead given the opportunity to have a differentiated business platform.

Tiger sniffing news is that Cao Cao travel is also in contact with Shenzhou car rental to discuss the acquisition.

It is a coincidence that buyers who have contacted car rental companies in China have been exposed one after another. Many analysts have pointed out that acquisition contact is indeed a matter of course, but at best Shenzhou Rent-a-Car has deliberately released the wind and shifted the focus of public opinion in order to get rid of the negative effects of Ruixing.

“Actually, the Ruixing incident did not have much impact on car rental in China.” Zhu Xu believes that the fraud of Ruixing is at the capital level, not the quality of coffee or the sanitation of the coffee, but the fraud of operational data. “People who drink Ruixing Coffee will not feel that Ruixing Coffee has deteriorated, but are afraid that Ruixing will quickly use the coupon.” That is to say, the quality of Ruixing Coffee has not changed, but Ruixing’s brand image and sustainability have been damaged .

The same is true for car rental in China. As the chairman of Shenzhou and Ruixing, Lu Zhengyao’s personal untrustworthiness can be resolved by changing the chairman. The damage to the brand image will not have much impact on the business of Shenzhou, because the key elements of Shenzhou car rental service quality, car rental and other factors have not changed.

From a business point of view, the run on the capital market, the Shenzhou car rental under the heavy asset model may not be able to retreat.

Shenzhou car rental adopts self-operated mode, that is, people, cars, and venues are all their own. Under this model, heavy assets and operations are required. The car rental platform needs to buy a car, build a site, form a team, and maintain and repair the vehicle.

But different car rental models have different advantages. The self-operated model has a high degree of service standardization and lower cost per order. It can also use the continuous renovation and depreciation of the fleet to optimize assets. It is also because of the heavy asset marketing of car rental in China, its development speed and market awareness are far ahead in the car rental market.

“Objectively, if Wukong had money at the time, it might consider heavy assets in some core cities.” Zhu Xu said that the expansion of heavy asset car rental platforms is very slow, and no one in the industry has the patience to invest a lot of money to rebuild a car rental company with a heavy asset model, so Wukong chose the platform model.

The changes in the internal environment of the car rental industry caused by the implication of this product are disrupting the industry pattern and also lurking opportunities.

“Actually, Shenzhou has been developing very slowly in the field of car rental. A few years ago, it looked like what Shenzhou was like. It still looks like it. Its outlets, car models, services … have not changed much, but instead it has focused on “Shenzhou special car.” Industry sources said that the development of car rental in China in recent years is still beyond the expectations of the industry.

After this incident, “It is not ruled out that some users feel that there is a problem with car rental in Shenzhou, and they will choose other car rental brands. This is also an opportunity for Wukong and other car rental peers.” Zhu Xu believes that the action of car rental in Shenzhou is essentially waiting Users respond to negative events in the capital market. The competitor’s mistakes are precisely opportunities for other platforms.

compete for a new market spawned by the epidemic

The huge impact of the new crown epidemic on the car rental industry is gradually weakened by the national resumption of work. For car rental platforms that are waiting for opportunities, this is undoubtedly a rare opportunity.

A CEO of a car rental company previously told HuXian that the car rental company’s orders lost 50% during the epidemic. Zhu Xu told Hu Sniff, “The Qingming Festival, Wukong car rental orders reached a new high, basically returning to the level of 70% or 80% before the festival. It is higher than the same period last year.” Although it can not increase by 3 to 5 times than before, but now The growth rate indicates that the market is recovering.

In the past, most of the car rental orders came from travel, but now, the demand for car rental for commuting travel has increased significantly.

General car rental platforms. In the long-term and short-term rental business, short-term rentals have a large order volume and a high proportion in the business. This outbreak has greatly increased the orders for both short-term and long-term rentals. On the one hand, people still maintain a cautious attitude towards public transportation, which increases the number of commuting car rentals to and from work. On the other hand, the company is considering safety and will give employees subsidies for car rentals.

“Some companies will provide employees with benefits, and put some money to let employees rent cars for commuting at low prices, and some also arrange shuttles for employees.” Zhu Xu feels that the safety and convenience of renting a car to work makes commuting needs a long-term demand. status.

Based on the current epidemic situation, the long-term strategy of travel prevention and control will help users gradually establish the habit of commuting to work. Under the restriction of travel, people’s desire to go out is greater, which will also cause retaliatory travel consumption to a certain extent.

The users who were educated by the epidemic and the market growth that they have spawned are the ultimate goals after frequent actions such as Wukong travel and car rental in China. On a larger level, the brand effect of Avis has driven competition in the high-end market for corporate services, and standardized services have become the core competitiveness.

For Shenzhou car rental, whether it is “undercut” by Wukong’s travel business or acquired by capital, it will become the key to changes in the industry.