Although rental car agencies may be facing dismal times in the United States and Europe, there is hope that a new car rental agency venture from Shanghai China may succeed.  China’s eHi rental car company is a new business that might take off in China.  The company recently finished raising over $20 million dollars from private investors, and plans to make an initial public offering in 2011.

This bold move comes as rental car agencies in the United States, such as Hertz and Avis have laid off workers.  But observers say that China offers a very different market landscape that the United States.  President and co-founder of eHi Ray Zhang said in an interview that in the future, car owner ship in China will be restricted because of the lack of availability of space and antipollution measures in major cities.  Zhang is betting this will create a large market for rental cars in China.

Though the money raised will help eHi upgrade its fleet, the company still faces stiff competition from international and domestic rental companies such as Jinjiang, a state owned Rental Company.

Zhang points out that if eHi is able to secure a larger market share, it will have the potential boost profits to 100 million yuan.

Thanks to www.reuters.com for the above quotes, for more information visit their website.