China Unveils Three-Year Plan to Boost Car Rental Industry
China has introduced a sweeping new policy framework to overhaul its small passenger vehicle rental industry, targeting universal service coverage at airports and high-speed rail stations, free cross-city vehicle returns, and full digitalization by 2028. Ten government departments jointly issued the “Three-Year Action Plan for Promoting High-Quality Development of Small Passenger Vehicle Rental (2026-2028)” on June 1, according to People’s Daily.
Context and Background
The plan comes as China’s car rental sector experiences explosive growth. As of the end of 2025, the national small passenger vehicle rental fleet had reached 4 million vehicles, with the industry in a rapid development phase. During the “15th Five-Year Plan” period (2026-2030), the national short-term rental market is expected to grow at an average annual rate of approximately 15%, according to the Ministry of Transport.
Despite this momentum, the industry faces structural challenges. “While the industry is developing rapidly, there are also problems such as insufficient coverage of rental service networks, low convenience of rental services, and irregular market order, which affect consumers’ car rental experience,” said Yang Yang, Associate Professor at Beijing Jiaotong University, as reported by Xinhua News Agency.
Key Developments
The action plan outlines 13 key tasks across five major areas, focusing on service network expansion, convenience improvements, market regulation, and industry integration.
Service Network Expansion
By 2028, the plan aims to achieve rental service coverage at all civil aviation airports and high-speed rail stations. Expressway service areas will add or upgrade 30,000 EV charging points with 60kW+ power capacity by the end of 2028, supporting the transition to new energy vehicles (NEVs) in rental fleets.
Cross-City Returns and Digital Services
One of the most consumer-friendly measures targets the long-standing pain point of cross-city vehicle returns. By the end of 2027, the plan aims to achieve “one-place registration, province-wide use” for rental vehicles. By 2028, mutual recognition of rental vehicle registration will extend across the Beijing-Tianjin-Hebei region, Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area, and Chengdu-Chongqing Economic Circle.
“These measures specifically address the long-standing pain points in the car rental industry, comprehensively enhancing consumers’ travel experience,” said Gao Dewu, CEO of Shenzhou Car Rental, as reported by Xinhua. “A series of convenience service rules essentially set a service baseline for the industry, forcing operators to optimize services and standardize operations.”
Market Regulation
The plan targets industry abuses including “sky-high damage pricing” — a practice where rental companies charge exorbitant fees for minor vehicle damage. It calls for standardized contract templates, a credit evaluation system for both companies and renters, and a crackdown on fraud and illegal vehicle sales.
Analysis and Implications
Wang Xuefeng, Vice President of the Modern Tourism Research Institute at Beijing Jiaotong University, highlighted the broader economic significance: “Building an integrated ‘highway/rail/air + car rental’ transport system can not only reduce road congestion caused by personal self-driving and holiday hub transfer pressure, but also significantly alleviate the pressure of out-of-town vehicle inflow during peak seasons at 5A-level scenic spots.”
The policy is expected to create a “triple-win” scenario: consumers gain more convenient and affordable services, the industry benefits from standardized regulation and smart upgrades, and the broader economy sees coordinated development across automotive, tourism, and financial sectors.
Market Response
Major players are already scaling up. Shenzhou Car Rental, one of China’s largest rental companies, now has 180 million registered users and a fleet exceeding 200,000 vehicles — double its 2020 size. During the 2026 Spring Festival, the platform saw orders and user base grow over 50% year-on-year, with over 360 cities reaching “full rental” status, as reported by Shanghai Securities News.
What’s Next
The action plan represents a concrete implementation of national-level consumption strategies, including the “15th Five-Year Plan” and the “Consumption Stimulus Action Plan.” With implementation timelines stretching through 2028, the coming years will test how effectively these measures translate into tangible improvements for consumers and businesses alike.
Key milestones to watch include the 2027 deadline for province-wide vehicle registration recognition and the 2028 targets for cross-regional mutual recognition and charging infrastructure completion. The success of these initiatives could serve as a model for other service sectors undergoing similar digital and regulatory transformation in China.