China's leading auto rental provider CAR Inc will purchase tens of thousands of vehicles from Shanghai Volkswagen in three years to further consolidate its position in the industry.

Zang Zhongtang, vice-president of CAR, said he is confident of China's car rental market as it is growing at around 27 percent year-on-year.

Car purchase is part of the deal that CAR signed with Shanghai Volkswagen on May 6. The two will also join hands in such things as auto lease and promotional campaigns, according to the agreement.

CAR was established in 2007. As the largest auto rental provider in the country, it had 63,522 lease vehicles at 700 stores all over the country by the end of 2014.

In addition to car rental, the company launched chauffeur-driven car-on-demand service in January. Now the service is available in more than 60 cities nationwide.

Taxi shortage is a main reason behind the thriving "supplement market", according to an industry report by Tencent.

Statistics showed that the number of licensed taxis in Beijing, around 66,000 in 2014, has barely increased in the past 10 years, while the city's population has tripled from 7 million to 21.9 million.