CAR Inc, China’s leading car rental company formerly known as China Auto Rental, plans to significantly expand its rental fleet over the next three years with the purchase of "tens of thousands" of vehicles from Shanghai Volkswagen.

The two companies also will work together on joint marketing campaigns and leasing programmes, according to an agreement signed this week.

CAR’s vice-president Zang Zhongtang claims that China’s car rental market is expanding by around 27% per year at present, which represents a significant opportunity for the company.

CAR was established in 2007 and currently has a fleet of almost 64,000 vehicles operated by 700 outlets nationwide. The company also aims to expand into the chauffeur-driven taxi business, with taxi operators in major cities in China having failed to keep up with fast-growing demand.