Car2go to launch service in Chongqing

City is car-sharing company's first city in Asia, will begin in second half

Moovel GmbH, a wholly owned subsidiary of German automaker Daimler AG, plans to launch its car-sharing service car2go in Southwest China's Chongqing Municipality in the second half of 2015 as its first such operation in Asia.

At the signing ceremony held for the agreement between moovel GmbH and the Chongqing government on Thursday, executives from the company and Chongqing officials expressed their confidence in bringing the new mobility solution to the city.

"We believe that Asia will be the third successful market for car2go, in addition to Europe and North America," Roland Keppler, COO of moovel GmbH and responsible for car2go, said at the press conference, noting that success in Chongqing will serve as a progressive example to the entire Asian market.

Users will be charged by the minute, but do not need to pay for fuel and parking, Guo Zheng, head of moovel China, said at a press conference before the signing ceremony.

He also said that car2go will adopt Alipay, Alibaba Group's payment tool, and Wechat payment for customers in the Chinese market.

Car2go, which was launched in 2009 in Germany, is the world's first car-sharing system with an instant vehicle rental system with no fixed parking locations, meaning the car does not need to be rented and returned to a designated place.

Users can use an app to rent a Daimler Smart car on the street, pay through an online account and then leave the car at a parking lot when they are finished.

China's growing prosperity has made it the world's biggest auto market by sales, which has resulted in traffic congestion and poor air quality in its metropolises.

To tackle the problem, eight cities, not including Chongqing, have enacted an auto purchasing limit policy, while some car-hailing apps have become popular since 2013.

However, car-hiring services, such as Uber, which includes chauffeur service, have met a backlash in China, both from local governments and taxi drivers.

Under these circumstances, car rentals, especially short-time car rental service, can become a solution for Chinese cities, Gao Jian, an industry analyst at Shanghai-based consultancy LMC Automotive, told the Global Times Thursday.

Car2go is operated in 29 European and North American cities such as Washington, Berlin, Amsterdam, New York and Toronto. It currently has more than 12,500 vehicles and 1 million members all around the world.

Guo told the Global Times that the company chose a Chinese city as its first market in Asia because they received the most positive feedback from China, noting that it is not easy to promote such a car-sharing project.

Even if the company can design a highly effective network of many cars to put in the city, parking will be a hard issue, especially if there is no designated place to park the rental cars because parking lots are limited in most big Chinese cities, Zhang Zhiyong, a Beijing-based independent auto industry analyst, told the Global Times Thursday.

Guo said that they are still in preparation so the company cannot say what is the specific number of cars that will be placed in Chongqing but as in other cities, the project will start with "a few hundred" Smart fortwo cars.

The company also declined to reveal the price for car2go's service in Chongqing.

A Smart fortwo charges 0.29 euros ($0.34) per minute in Berlin, according to the car2go website, while the minimum charge for a taxi in Chongqing is 10 yuan ($1.69) for the first three kilometers.

The price will be another key issue, Zhang said, noting that short-term car rental services often adopt electric cars to reduce its costs and charges to its customers, such as Chinese automaker Geely Holding Group and its joint venture Kandi Electric Car Corp which launched a similar project in Hangzhou, capital of East China's Zhejiang Province.

However, Guo said that the first batch of Smart fortwo for the project will be normal gasoline-powered cars rather than electric. About the power charging facility issue, he said green vehicles is too ambitious for now.

A subsidiary of Daimler AG, moovel GmbH provides services in areas such as car sharing, car pooling, taxi and intelligent parking.