Car crazy

China adores cars. Can one man persuade a nation to rent, not buy?
October 17, 2012

Shanghai's overhead highways illuminated by LED lights

At a bus stop near Beijing’s Dashanzi art district, shoppers swayed with bulging bags. Horns swelled. Trucks rumbled. Saturday. Six o’clock. Stuck.

Beside me, my friend, Wang Shuyue, murmured in the lyrical Mandarin of the capital city: “The traffic in Beijing is really over the top.” She kicked a pile of ashy fallen leaves. The days had grown short. We waited in the dark.

Beijing, once the kingdom of bicycles, is being colonised by the car: there are now more than five million in the city. Traffic has become such a problem that in January 2011 the government enforced new licence plate restrictions to ease congestion. Now over a million Beijingers compete in a monthly lottery for the right to buy a new car. About 20,000 car registrations are up for grabs each time and unfortunate would-be buyers can end up waiting for over a year without seeing their number come up.

Our bus arrived, and we packed in among fierce elderly women with razor-sharp elbows. “I really need a car,” said Wang as a squat woman in a padded jacket boxed her in. “On the weekends, I’m stuck on the bus like this. On the weekdays, I leave my apartment at seven in the morning, stuff myself into a crowded subway and arrive exhausted before I even start work.” A stray piece of hair escaped her ponytail. She was too wedged in to brush it off her face. “At least if I had a car I could have a little more space; a little more freedom.”

It was these kinds of frustrations and desires—common to upwardly mobile young Chinese—that inspired Zhang Ruiping (or Ray Zhang, as he’s known abroad), entrepreneur and Shanghai native, to found eHi Car Rental in 2006. Motivated by a potent mixture of business ambition and social and environmental concern, Zhang is aiming to turn eHi into the largest car rental company in China.

“Chinese people have been underserved in terms of personal convenience and privacy, but they’re starting to value these things. We started eHi because we believe Chinese people can have these things without owning a car,” Zhang told me in his Shanghai office. “It would be a catastrophe if China continued to follow the American model of car ownership. With eHi, you drive when you really need to drive, not just because you own a car. We hope to deter many Chinese families from buying their second, third, or—if we’re lucky enough—first car.”

At the end of 2002, average vehicle ownership per hundred urban households was 0.9. By the end of 2011, it was 18.6. That’s few in comparison with over 70 per cent ownership among British households, but the flood of new private vehicles in Beijing and other Chinese cities is congesting roads and darkening skies. In June, the number of automobiles in China reached 114 million.

There are at least 40,000 car rental companies in China, according to Zhang, but most are small local businesses. No car rental company has yet won a dominant share of the market. Between eHi’s founding in 2006 and my meeting with Zhang in 2010, the company had zoomed towards the front of the pack, with more than 100 outlets nationwide serving over half a million clients. In seeking to lead the industry Zhang has positioned himself as a central figure in the development of the Chinese relationship with the car. That means taking on car culture and the complex forces that have given rise to it.

American politicians and businesses have long encouraged China to embrace the US’s ideals. In the case of car ownership, they got what they thought they wanted—perhaps to the world’s detriment. It is hard to imagine why China would follow the American car-dependent formula, where suburban sprawl sucks the lifeblood out of once-vibrant cities and the government subjects its national policies to the whims of oil-rich pariah regimes, but history has played a role in this trajectory.

Early in the 20th century, Detroit pushed American automobiles into China. American engineers and Chinese returnees from western nations led efforts to raze city walls to make room for modern roads. However, in 1989 China still had only 168 miles of motorway. At the end of 2010, China’s minister of transport, Li Shenglin, announced that the country had almost 46,000 miles of motorways, almost as many as the American Interstate Highway System.

Although China’s major cities are building underground networks and high-speed trains, alleged corruption, technical problems, and accidents have plagued efforts to create sustainable public transport. And even as mass-transit options expand and roads increase, in the past two decades the number of vehicles in China has grown three times faster than road capacity.

One major reason for this is the way Chinese cities are being built. Around the nation, as traditional urban housing makes way for commercial development, large high-density suburban projects blossom. Suburbs require cars, so car ownership has become the norm there.

Access to a personal vehicle is transforming how middle-class Chinese live, socialise, and shop. During an autumn 2010 trip to Shanghai, I stayed with my friends Gu and Xue in their spacious apartment in a far-flung suburb. The young married couple enjoy living here because it is quieter, cleaner and cheaper than the city centre. From their window, they can see a small park where willow trees dance and grandmas coddle babies. But there are few amenities in their neighbourhood within walking distance.

Like most people living in the suburban apartment compound, Gu and Xue decided to buy a vehicle, a Buick Excelle. “The commute was aggravating. We bought a car so that I could drive to work, pick my wife up somewhere along her way home, and grab dinner before we headed back.” On their way to attractions outside the neighbourhood, residents barrel cars around the residential drive at 40 mph. Adolescent guards wave them through the compound’s entrance gate like F1 marshals with racing flags. During my stay, I noticed only a handful of people leave the complex by foot.

Less than a year and a half after Gu bought his Buick, a cab driver crashed into it. His car was in the shop for nearly two months. Going back to using cabs and public transportation, he said, was a personal hell.

On a warm day that autumn, Zhang sent a driver to pick me up from my friends’ apartment to take me to eHi headquarters. The chauffeur was in his late twenties, with a thin neck and a generous round head. He liked working for eHi because there wasn’t the same pressure to make money by fare. “That’s why these guys drive so aggressively,” he said, motioning to a cab driver. “Most of us drivers don’t have any benling [skills]. That’s how we wind up doing this,” he said. “But some gigs are better than others.”

Driving through Shanghai, one sees how the car has shaped the city. The creation of its system of ring roads extended the city’s vast boundaries and transformed the Huangpu river into Shanghai’s heart rather than its extremity. These developments were part of a massive push to build China’s road infrastructure that began in 1984. During the next three decades, developers connected poor inland provinces to the wealthy coast and laced modern cities with highways—forcing countless families from their homes in the process. Construction of a single two-mile section of Shanghai’s inner ring road displaced 12,000 people, according to Thomas J Campanella’s The Concrete Dragon: China’s Urban Revolution and What it Means for the World. In some cases, city officials could have spared much expense and heartbreak by choosing tunnels rather than bridges, but tunnels didn’t make the same statement. A bridge to the future was sexier than a tunnel to the future.

Arriving in the centre of town, we were confronted with men driving mopeds through thickets of fruit sellers carrying baskets on poles. Buses blazed past neon billboards. The eHi offices were around the corner from St Ignatius cathedral in Xujiahui, one of Shanghai’s busiest commercial areas. The traffic lurched, as did my stomach. I learned that opening a window was not the solution—the exhaust fumes are a knockout punch for the car sick.

EHi’s offices buzzed with more than 400 employees rubbing shoulders in front of monitors accessorised with stuffed animals and clip-on electric fans. Zits and experimental hair colours betrayed the staff’s youth—mid-twenties on average. “They sometimes call me uncle,” Zhang said. Although he treated his staff with affection and respect as we toured eHi, and told me the company offered employees stock options, Zhang admitted one of the reasons his business model worked was because of low labour costs. “I’m not really proud of this,” he said.

Zhang wore a crisply tailored blue pinstripe shirt and grey trousers that revealed a trim waistline. When I pointed out he hadn’t acquired the typical Chinese middle-aged businessman’s girth, he grinned and said he assigned dinner and drinking duties to a friend. He wanted to avoid the pitfalls of modern Chinese business culture, he said. “There are so many big failures in China, and it usually has to do with being too aggressive, focusing too much on short-term results. Many businessmen can’t contain their egos. They’re afraid the competition will take the lead. I’m not in this for the quick flip. I want to build a sustainable business.”

Zhang’s rhetoric sometimes sounded scripted, but his ideas were admirable, and he seemed passionate about his beliefs. He often talked himself into a frenzy. “China doesn’t need another web-game company addicting teenagers, another rice wine or tobacco company, or another real estate tycoon with an associated official in jail on bribery charges. China needs a different value system,” he said, leaning forward on a black couch. Even from his office on the 23rd floor, car horns could be heard sounding non-stop.

Zhang’s journey to his current position began in 1985, after he graduated from Fudan University, one of China’s most prestigious higher education institutions. He travelled to the US to study computer science at California State University, Sacramento. There, Zhang bought his first car—a used Toyota Corolla—for $800. He learned how to drive a manual car in an empty parking lot at night. Later, Zhang worked with a business partner to set up Aleph, a logistics software company which provided car service companies with online systems and communications technology. At its height, Zhang says Aleph owned a decent share of the US market for technological solutions for ground transportation services.

But then the America that Zhang had known for 15 years dissipated. The dotcom bubble burst, and 9/11 dampened the nation’s spirit. Zhang turned his attention back to China. While he’d been away, his home country had liberalised its economy and fattened its pockets. In 2002, Zhang returned to scout business opportunities for Aleph but there weren’t enough opportunities. “At that time I asked myself a question, one that seemed quite natural: what could I do for my own country?” He returned to Shanghai to study for a master’s degree in business and mapped out his plan to launch eHi.

Zhang’s timing could not have been better. In recent years, young Chinese not yet able to afford their own cars have embraced rental. My visit to eHi came a couple of months after the end of a particularly snarled summer in China. A traffic jam between Beijing and Inner Mongolia that was over 60 miles long made world headlines for ten days. Beijing has attempted to curb clogged roads and smoggy skies with a series of driving restrictions, but if Chinese consumers insist on emulating US car ownership rates, China is on track to accumulate more than a billion cars, said Zhang. It’s a number that keeps him up at night.

“Look at our cities now! A mess! Shanghai, Beijing… How many Shanghais and Beijings are we going to have in China? This is going to be a disaster, not just for Chinese people, but for all mankind. We’re not going to see the sun again.”

It is not just the environment that has Zhang worried. “If our civilisation is not moving forward, what will become of it?” he asks. “Owning the biggest cars, buying ten Louis Vuitton bags in one shot—it doesn’t fit with our country’s new economic status. It’s ugly rich. Car sharing, resource sharing: in China this could be a revolution. A cultural revolution!”

Zhang’s revolution won’t be easy. Providing a good service, adding hybrids—these are great benefits to potential eHi customers, but not as thrilling as showing off your new Mini Cooper. Uprooting the aspirational object, replacing it with a new green culture: these are greater challenges. In China, car ownership announces personal status. It represents security. In many cases, it has become an expected part of the marriage contract.

These ugly realities were on full display in 2009, when video footage apparently filmed on a mobile phone was uploaded onto the website In the video, a couple argues in a Buick showroom as they stand alongside a lipstick-red car.

“This car doesn’t suit you,” says the man. “This car does suit me; it does suit me!” the woman screams.

The woman jumps into the car, revs the engine and peels forward as other shoppers scramble out of the way. “Stop the car! Stop the car!” the man and the sales agent shout, running alongside and tapping the windows. She backs up the Buick and then drives it forward again. Then she repeats the process. Finally, the man relents. “OK, OK, OK! Stop the car! I’ll buy it! I’ll buy it!”

That the video turned out to be a staged online ad for Buick didn’t detract from its power. It rang true—sparking a nationwide conversation and attracting nearly seven million views.

EHi’s success does not require all Chinese to change their thinking about car ownership, Zhang told me. Ten per cent of aspirational buyers is enough. Financially, this may be true, but for eHi to make the broad social and environmental impact it claims it is after, it needs to do better. Shaving ten per cent off millions of new car owners still means a lot of new cars will hit the streets.

What’s more, the social impact of car ownership may not be all bad. Car ownership is also giving young Chinese a new outlet for creativity and adventure and, in a nation of only children, where religious, civic, and political affiliation opportunities remain limited, it provides a ready-made tribe of like-minded friends.

In the eastern city of Nanjing I met Xue Peng, an e-commerce entrepreneur in his mid-30s, who wanted to show me how other young people enjoy their cars. As we zoomed toward the western part of the city in his Mitsubishi Lancer EX, his speakers pumped electropop by American singer Ke$ha. Soon we arrived at a wide road split by an island. “The racing happens here,” he said.

Across the country, racers and fans organise online and meet in the middle of the night in suburbs like this one. Sometimes racing involves gambling, but mostly it is just a way to let off steam and test the limits of new toys. For spectators, it is raw performance—very different from the choreographed shows on television.

“Racing became cool with movies like The Fast and the Furious series and video games,” said Xue Peng. “Many drivers modify their cars to go faster, switching out engines and stuff. I don’t race, but I installed an air-charger so my car would purr louder and I’d have more control. It makes other cars respect mine—that’s a big part of driving in China.”

Another video of blood-pumping car exhibitionism emerged in 2010. In it, eight women members of a car club in Wuhan wearing different coloured stockings performed an all-legs dance through their sunroofs. The effect was akin to synchronised swimming combined with (fairly tame) pole dancing. Some questioned whether or not this wasn’t also another staged advertisement, but regional car clubs often organise outings or activities online. Sometimes they even act like gangs. In 2007, on an expressway outside of Nanjing, a Hummer shouldered into a convoy of Mazda-driver club members. Afterwards, they took their revenge by surrounding the Hummer on all four sides and forcing it to slow down to 18mph for several minutes.

To keep up with the car-owner clubs, eHi organises out-of-town rental packages to the countryside to eat crab or view ancient cities. “Of course, access to a car can make your life better and broaden your horizons, but we maintain you don’t have to own a car to enjoy the benefits,” Zhang said.

When I asked Zhang whether eHi’s growth contradicts its environmental goals—the more successful it becomes, the more cars it adds to the road—he tensed. “We should instead ask: without eHi how many more cars would be on the road? If our aim is to eliminate automobiles, then we, along with automobile manufacturers, shouldn’t even be in business.”

As 2012 draws to a close, things are looking good for eHi. In Beijing, however, eHi will not count Wang Shuyue among their customers. Fed up with her cramped commute, two months after I saw her she entered the number plate lottery. She won on her first try. A couple of months later she bought her first car, a Volkswagen. But her story might become the stuff of legend. Not only is it becoming more difficult to get a registration in Beijing, other cities—Guiyang and Guangzhou—have since introduced their own lotteries and auctions for new number plates. In August a public outcry in the central-northwest city of Xi’an forced officials to curb plans for licence plate restrictions but the policy is almost certain to grow. That’s good news for car rental companies, as is the increased domestic travel and urbanisation in China that experts forecast for the next decade. For Zhang, the road ahead for his company and vision is still long and winding, but he’s firmly positioned in the driver’s seat.

Adapted from "King of the Road," from "Chinese Characters: Profiles of Fast-Changing Lives in a Fast-Changing Land," edited by Angilee Shah and Jeffrey Wasserstrom (University of California Press)