Anji Car Rental and Leasing Co Ltd, a joint venture between Avis Rent-A-Car and Shanghai Automotive Industry Corp, has stepped up its expansion in China's short-term car rental market to meet soaring demand from private customers.

China's auto industry is speeding up rapidly and in the first six months, the country's total auto output topped 903,000 units, a 103.5 percent rise from the same period last year.

However, the increased production still failed to reduce car prices to meet the demand from the sedan buyers. It is estimated that more than 26 million Chinese driving license holders don't own cars, creating an immense market for short-term rental.

As part of its marketing strategy, Anji - China's first car-rental joint venture, which started operation on January 1 - is targeting individuals rather corporations.

"Due to the absence of an effective individual credit-rating system in China, domestic car rental companies rely heavily on the long-term leasing business targeting companies instead of private individuals," said Li Ming, a marketing section manager at Anji.

Another factor boosting demand for car rental services is the local government's move to tighten control over auto plate distribution, discouraging the use of motorcycles and banning the sale of scooters.

Anji has a fleet of 11 auto models in its 12 outlets around Shanghai.

The company maintains a 1,000-car fleet in Shanghai and charges a daily rental rate of between 200 yuan (US$24.16) and 600 yuan.

Its latest model is the Picasso, a mid-end passenger car from Dongfeng Citroen Automotive Co Ltd, which is priced between 190,000 yuan and 220,000 yuan, said Li. Users can rent the new model starting this week at 460 yuan per day.

In June, Anji introduced the two-door hatchback Gol, Volkswagen AG's cheapest car made in China. The daily rental costs 225 yuan.

The firm said first-half revenue rose 20 percent year-on-year.

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