Leading Chinese car rental firm eHi has confirmed a consortium led by Goldman Sachs has agreed to make a $70 million investment.
Existing shareholders – including Qiming Venture Partners, CDH Ventures, Ignition Capital, JAFCO Asia and New Access Capital – also committed to the deal, which is expected to close “soon”.
eHi founder Ray Zhang said: “This is by far the largest equity investment in the Chinese car rental business.
“After this closing, we will further expand our fleet and geographical coverage, provide more value-added services and pioneer a greener life style through car sharing for our customers, promote fleet outsourcing to more corporate clients, and maintain our leading position in China’s car rental market.”
eHi presently has the broadest geographical coverage and vehicle model selection in China, operating in 120 self-drive service locations in 34 cities with over half a million customers.
The first car rental organisation in China, the company is modelled on America’s Zipcar.
“As China’s consumers continue to purchase cars in increasing numbers, the congestion problem is becoming more severe,” Added Mr Zhang.
“Obviously, car rentals are able to improve China’s traffic situation and relieve parking issues, as well as pollution problems and oil demand.
“The largest car rental industry will be in China, and therefore the largest car rental company will be in China in the future,” he concluded.