July 5 (Bloomberg) -- China Auto Rental Holdings Inc., which calls itself the country’s biggest car-rental provider, said it will turn profitable for the first time this year as it pursues an initial public offering of its stock.
“We will certainly make profit this year,” Charles Lu, 43, chairman and founder of the Beijing-based company, said in an interview in the Chinese capital yesterday. The company will seek an IPO in “the U.S. or Hong Kong,” though it won’t happen this year, he said.
China Auto Rental, which counts Legend Holdings Ltd. and Hertz Global Holdings Inc. among its major shareholders, withdrew an application for a U.S. IPO last year as investor appetite for mainland Chinese companies evaporated since 2010 amid accounting scandals and share declines.
Lu said that license-plate restrictions in major cities, increases in taxi fares and a campaign to cut costs of government cars are benefiting China’s auto-rental industry by increasing demand for vehicle leases.
“We never expected us to be expanding at such a fast pace” when the business was set up in 2007, Lu said during the hour-long interview at his office in northeast Beijing.
Lu, who graduated from the University of Science and Technology in Beijing, is a self-professed soccer fan. The company is a sponsor of the Chinese professional soccer league and last month signed former Manchester United and Real Madrid star David Beckham to endorse the company.
China Auto Rental, which operates the zuche.com website, had about 700 outlets spread across 66 cities and 52 major airports in the country at the end of last year, according to Lu. It maintains a fleet of about 50,000 vehicles serving about a million individual clients, and uses Internet-delivered cloud technology to help customers track and manage their rentals, he said.
To contact Bloomberg News staff for this story: Tian Ying in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Young-Sam Cho at email@example.com