Car rentals set for strong holiday demand surge

China's car rental market is poised to surge ahead during the Chinese New Year holiday, driven by the longest holiday on record and a continuation of toll-free policies on highways, according to a report by domestic car rental platform Car Inc.

With an early start to the holiday and longer rental periods, cross-city car rental orders during the festive period are expected to rise by more than 70 percent and bookings for new energy vehicles are likely to surge sixfold year-on-year, the report showed.

The upbeat outlook comes as self-driving travel is set to dominate this year's Spring Festival travel rush. The Ministry of Transport estimates that cross-regional passenger trips during the 40-day holiday travel rush, spanning from Feb 2 to March 13, will reach a record 9.5 billion, with self-driving accounting for about 80 percent of the total.

Against this backdrop, car rentals have emerged as a key barometer of travel demand.

Car Inc data show that booking decisions have moved markedly forward, with reservations made one month in advance increasing by about 20 percent from previous years.

The extended nine-day holiday has also lengthened rental durations. The average rental period is approaching 10 days, while orders lasting nine days or more have also reached a record high.

The long duration is increasingly changing how people utilize the Spring Festival break. Instead of a single-purpose trip, more travelers are splitting their journeys between family reunions and leisure travel.

"Many users choose to return home for family gatherings in the first half of the holiday, then take their families on nearby trips or cross-city road journeys in the second half," said Gao Dewu, CEO of Car Inc. "This segmented use of rental cars has fully unleashed the consumption potential of the long holiday."

As a result, the car rental market is expected to see a rare "dual-peak" pattern — in addition to the traditional pickup rush on the last working day and Chinese New Year's Eve, a second peak is forecast around the fourth day of the holiday, Car Inc data showed.

To meet the demand surge, Gao said the platform has completed a major fleet upgrade of around 100,000 new vehicles ahead of the holiday.

The holiday travel boom is also highlighting clear generational shifts among renters. According to the platform, new users recorded double-digit growth this year, with those born after the year 2000 emerging as the fastest-growing group. Their bookings surged 63 percent year-on-year, making them a new growth engine for the market.

"Young users' pursuit of personalization and technology has directly driven demand for NEVs and distinctive models," Gao said.

The report showed that demand for personalized vehicle experiences has doubled, while bookings for NEVs have increased sixfold from a year earlier. Domestic NEV models featuring smart cockpits and spacious interiors have become particularly popular during the holiday.

The top five NEV rental models are BYD's Qin Plus and Song Pro, favored for their cost-effectiveness, as well as extended-range SUVs such as the Aito M7, Li Auto L6 and Voyah Free. Offering large cabin space and ease of range anxiety, the family-oriented vehicles have become popular choices for group travel.

Travel patterns during the holiday also reflect both north-south cross-regional flows and deeper penetration into lower-tier markets. Major hub cities such as Beijing, Guangzhou and Shenzhen in Guangdong province, Kunming in Yunnan province, and Haikou in Hainan province, remain the most popular destinations.

At the same time, demand is rising for winter-themed trips to northern destinations like Altay and Kashgar in the Xinjiang Uygur autonomous region, as well as warmer southern getaways such as Hainan's Sanya, Haikou and Yunnan's Xishuangbanna Dai autonomous prefecture.

Several smaller cities, including Henan province's Zhumadian and Xinyang, Guizhou province's Anshun and Sichuan province's Guangyuan, have also seen sharp growth in return-home bookings, underscoring the dual momentum of tourism and homebound travel, according to the report.