CAR Inc. rating downgraded to "BB"; outlook stable - S&P

   S&P Global Ratings today lowered its long-term corporate credit rating on China-based car rental company CAR Inc. (00699) to 'BB' from 'BB+'. The outlook is stable.
  It also lowered its long-term issue rating on CAR's outstanding senior unsecured notes to 'BB' from 'BB+'. S&P lowered the ratings to reflect a significant decline in CAR's long-term fleet rental business, which signals a deterioration in its competitive position.
  Since early 2017, the company has aggressively cut prices in the short-term rental business to try to gain market share. Although the move increased utilization, it also had a large negative impact on profitability, the credit rating agency said.
  S&P therefore lowered its expectation of CAR's profitability over the next two years. It believes fleet demand from UCAR Inc., as CAR's most important customer in long-term fleet rental business, will drop and that will directly affect CAR's overall rental revenue and EBIT margin.
  S&P expects CAR to face high competition in the long-term fleet rental business, which creates uncertainties on the segment's growth. It believes competition in the car rental business remains high even for market leaders such as CAR. This is evident from CAR's recent price cut in its short-term car rental business; its average daily rental rate declined to RMB234 in the first half of 2017 from RMB307 in the same period of 2016.