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A vital role in the global transportation economy, the automobile rental business is a dynamic and rapidly expanding sector. The market for rental cars is significantly impacted by monetary factors. Consumer spending patterns and travel habits are directly influenced by the overall health of the economy. In periods of economic prosperity, leisure and business travel tend to increase, creating a demand for rental automobiles. Conversely, economic downturns may result in less travel, which would affect the number of rentals. Variations in trade rates and fuel prices can also directly impact automobile rental companies' working costs, which in turn affects other aspects of the market.
The emergence of web platforms and mobile applications has streamlined the reservation process, increasing the convenience of car leasing for buyers. GPS route planners and electronic key innovations have enhanced the overall customer experience by providing tenants with easy-to-use equipment. Additionally, the rise in electric and crossover cars within rental fleets reflects the industry's adaptability to the growing demand for sustainable mobility options, which adds another facet to the market dynamics.
The rise of the shared economy and distributed stages of car rental has introduced a new perspective and challenged traditional rental models. Particularly recent college graduates tend to favor relationships over ownership, which contributes to the widespread use of short-term rentals. Additionally, a growing interest in eco-friendly vehicles has been spurred by increased awareness of environmental challenges. It is imperative for car rental companies to adapt to these shifting preferences to remain competitive, resulting in ongoing modifications to market components.
Rental companies that have been laid out usually set themselves out with their global reach, extensive armadas, and steadfastness programs. Meanwhile, the traditional rental model is being tested by disruptors such as ride-sharing services and versatility-as-a-service platforms, which blur the boundaries between automobile ownership and rental. Flexibility and improvement are essential for players to properly investigate the changing scenario as the organization continues to grow. Due to the ongoing influence of monetary trends, technological advancements, shifting consumer preferences, cunning tactics, and managerial considerations, the automobile rental market remains a vibrant and alluring segment of the larger transportation sector.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Segment Outlook | Booking Type, Rental Duration, Vehicle Type Application, and Region |
Car Rental Market Highlights:
Global Car Rental Market Overview
Car Rental Market Size was valued at USD 107.5 billion in 2022. The Rental Cars industry is projected to grow USD 200.4 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 8.1% during the forecast period (2024 - 2030). Auto rental is the service of renting automobiles for a set period of time through online or offline channels.
Rental Car services are primarily intended to serve travellers and individuals who do not own personal vehicles. Renting a car is thought to be a more cost-effective option than owning one because it allows for greater mobility, lower-cost travel, and avoidance of high ownership costs. For added convenience, service providers also provide other products such as car damage repair, insurance compensation policies, entertainment systems, global positioning systems (GPS), and Wi-Fi networks.
Source Secondary Research, Primary Research, MRFR Database and Analyst Review
Rental Cars Service Market Trends
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Budget Rental Cars services growth in the travel and tourism industry across the globe
One of the key factors driving the growth of the Rental Car industry is significant growth in the travel and tourism industry around the world. Furthermore, the growing urban population with an increased interest in adventure and travel is fueling Car Rental market growth. In line with this, people are turning to budget Rental Car services such as taxis and carpooling for increased mobility and cost-effective travel. Another growth-inducing factor is the implementation of favorable government policies, as well as increased awareness about environmental conservation.
Governments in both developed and emerging economies are emphasizing the importance of reducing vehicle emissions and promoting Rental Car management system as one of the most cost-effective modes of transportation. Other factors, such as the introduction of cheap car rental service through websites and mobile apps (smartphone-based applications), coupled with increasing expenditure capacities of the masses, is driving the growth of the Car Rental market revenue.
Car Rental Market Segment Insights
Car Rental Booking Type Insights
The Car Rental Market segmentation, based on booking type, includes Offline Booking and Online Booking. Online booking type segment is expected to grow to a larger revenue in respect to the Car Rental Market revenue. Online plugins for Rental Car apps and websites aid in the simplification of the car service process in five simple ways. For starters, it saves a car rental company time and money when managing rental transactions. Companies will see an increase in their chances of growing their business as a result of this.
June 2023: Instead, more than 300 business professionals who operate and support the Enterprise Rent-A-Car, National Rental Car and Alamo brands globally across the Latin America (LAC); Europe, Middle East and Africa (EMEA); and Asia-Pacific (APAC) regions are coming to town for a series of in-depth informational presentations and networking events, designed to accelerate the global growth of the Enterprise Holdings brands internationally. The end goal: aligning on achieving Enterprise Holdings’ vision to be the world’s best and most trusted mobility company
Car Rental Duration Insights
The Car Rental Market segmentation, based on rental duration, includes short-term and long-term. The Rental duration specifications define the minimum and maximum rental periods for renting from a specific rental branch. These specifications may vary depending on the supplier and the branch. Traditional Rental Car business usually has a one-day minimum rental period. The maximum rental period is typically 28 to 60 days. However, many suppliers also provide special long-term rentals that can be subscription-based (the renter pays for the vehicle on a monthly basis). long-term is estimated to be the most opportunistic segment during the forecast period. The rental cars are used for long-term trips and journeys. It is mostly used for outstation trips, due to this long-term car rental services will boost Car Rental market revenue.
Car Rental Vehicle Type Insights
The Car Rental Market data has been bifurcated by Luxury, Executive, Economy, SUV's, Others. Based on the vehicle type, the economy cars segment accounted for 35% of revenue share in 2022. The economy cars are very efficient in terms of fuel consumption. Most of the Car Rental market players prefer economy cars for Rental Cars services, owing to low maintenance and procurement costs. Also, economy cars are compact in nature and provide enough comfort to the passengers. The executive cars segment is expected to hit 5.8% of CAGR during the forecast period. Executive cars are larger than economy cars but smaller than luxury cars. The regions such as Asia-Pacific and Latin America are flourishing with the strong economic growth, which also helps key market players to provide better transportation services. This factor is driving the growth of the executive cars segment.
Car Rental Application Insights
Based on Application, the Rental Car industry has been segmented into Leisure/Tourism business. The rise in urbanization has also contributed to an increase in demand for car rental apps and their services. The rise in the upper-middle-class group is also contributing to Car Rental market growth. As a result, the increased demand for airport Rental Cars services is creating profitable opportunities for the segment's growth.
Car Rental End User Insights
Based on End Users, the Car Rental industry has been segmented into Self-Driven, Chauffeur-Driven. The rise in demand for tourism has also contributed to an increase in demand for Rental Cars services. As a result, the increased demand for airport car rental services is creating profitable opportunities for the segment's growth.
Car Rental Industry Regional Insights
In terms of revenue, North America held 53% of the market in 2022. The increase in the number of leisure and business tours across North America is driving Car Rental market growth. Trips to North American cities such as New York, Los Angeles, Chicago, San Francisco, and Las Vegas are also helping the Rental Car business growth.
During the forecast period, Asia-Pacific is expected to grow at an 8.4% CAGR. The rise in consumer spending for tourism and travel, combined with rising disposable income, is driving the growth of the Asia-Pacific car rental market during the forecast period. Market participants include Uber, Avis, Ola, Hertz, Didi Chuxing, Sixt, Zoomcar, Europcar, GrabTaxi, Hailo Line Taxi, and Blue Bird are offering services in the Asia-Pacific region.
Further, the major countries studied are The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 2 Car Rental Market Share By Region 2021 (%)
Source Secondary Research, Primary Research, MRFR Database and Analyst Review
The Europe Car Rental Market was valued at USD 10.5 billion in 2021, with a CAGR of 13.1% expected to reach USD 20.1 billion by 2030.
France's car rental market is expected to grow at a significant rate during the forecast period due to the increasing number of tourists in the country. The increasing revenue in France has generally been attributed to a trend in domestic travel spending, which is primarily the result of an increase in foreign tourists.
Germany car rental market is expected to grow at a significant CAGR during the forecast period as Germany is the largest manufacturer of cars in Europe. The Rental Car available in Germany are usually at cheaper rates when compared to other regions in Europe. Hence, the low cost of car rentals in Germany is driving the market growth rate during the forecast period.
The China car rental market dominated the Asia Pacific Car Rental Market by Country in 2020 and is expected to remain dominant until 2030, achieving a market value of $6.93 billion by that time. The Japan market is expected to grow at a CAGR of 3.6% during the forecast period (2021 - 2030). Furthermore, the India market is expected to grow at a CAGR of 4.8% during the forecast period (2021 - 2030).
Car Rental Key Market Players & Competitive Insights
The market is moderately consolidated, with a large number of international and domestic companies operating globally. However, the industry is on the verge of consolidation, with only a few major companies capturing a significant market share. Enterprise Rent-A-Car, The Hertz Corporation, Sixt SE, Europcar, and Avis Budget Group are among the key participants. These players' primary focus is on improving their services in order to gain a customer base and maximize profitability.
For instance, Sixt SE has released a smartphone app that allows company car drivers to manage their contracts with the touch of a button. From March 2021, Hertz charge an annual membership fee for its 24/7 service, which allows members to rent cars and vans contactless.
Key Companies in the Car Rental Market includes
- Avis Budget Group
- Europecar
- Enterprise Holdings Inc.
- The Hertz Corporation
- Toyota Rent-a-Car
- Sixt SE
- Alamo Rent-a-Car LLC
- Carzonrent India Pvt Ltd
- Localiza
- ANI Technologies Pvt. Ltd
- Others
Car Rental Industry Developments
​February 2023: UFODrive Partners with CarTrawler on EV Rentals, UFODrive, an app-based EV rental company, announced a new partnership with CarTrawler, a global B2B provider of Rental Car and mobility solutions to the travel industry. CarTrawler’s end-to-end technology platform is already used by United Airlines, American Express, easyJet, Alaska Airlines, SWISS, Hotels.com and Emirates. From more than 30 locations in Europe and the United States, customers will be able to bypass lines, forget keys, and drive away in minutes.
Hyundai rolls out monthly EV rental program, Hyundai says it’s working to satiate drivers’ electric vehicle (EV) curiosity with a new subscription service that allows users to lock into an EV contract on a month-by-month basis. Its Evolve+ EV subscription service for the Kona Electric and IONIQ 5 models is a move being marketed as a “flexible and affordable” way for consumers to test the waters on new vehicles without committing to a long-term lease or purchase.“With no paperwork, no commitment, and no long-term loan, Evolve+ is an optimal solution for the ‘EV-curious’ car shopper,” said Olabisi Boyle, Hyundai Motor North America’s vice president of product planning and mobility strategy.
Car Rental Market Segmentation
Rental Cars Booking type Outlook
- Offline Booking
- Online Booking
Rental Cars Duration Outlook
- Short Term
- Long Term
Rental Cars Vehicle Type Outlook
- Luxury
- Executive
- Economy
- SUV's
- Others
Rental Cars Solution Application Outlook
- Leisure/Tourism
- Business
Rental Cars End User Outlook
- Self-Driven
- Chauffeur-Driven
Rental Cars Service Market Regional Outlook
North America
- US
- Canada
Europe
- Germany
- France
- UK
- Italy
- Spain
- Rest of Europe
Asia-Pacific
- China
- Japan
- India
- Australia
- South Korea
- Australia
- Rest of Asia-Pacific
Rest of the World
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Middle East
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Africa
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Latin America
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