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People's use and accessibility to mobility services have been influenced by notable changes and trends in the car rental sector in recent years. An increasing number of consumers are choosing short-term rentals over conventional, long-term commitments as businesses like Zipcar and Car2Go gain traction. This shift is being driven by the convenience and flexibility that these solutions offer, allowing users to utilize a car whenever needed without having to worry about ownership.
Despite the rise in popularity of electric cars, innovation trends have a significant influence on consumer behavior. With mobile applications, automobile rental companies now have essential tools that let customers constantly reserve, locate, and unlock cars using their smartphones. By attracting well-informed buyers, this enhanced customer experience has not only smoothed up the rental relationship but also contributed to the overall growth of the market.
In addition, the concept of autonomous cars is becoming more and more prevalent in the vehicle rental sector. While fully autonomous cars are still not common, some companies are making an effort and investing money to advance the technology. This innovation has the potential to revolutionize the vehicle rental industry by providing customers with a hands-free and beneficial driving experience. Administrative challenges and concerns about public recognition pose obstacles to the widespread acceptance of autonomous vehicles in the near future.
To sum up, the growth of membership-based business models in the vehicle rental industry has been steadily increasing. Membership services give customers the flexibility to pay a monthly fee for access to a variety of vehicles instead of the traditional daily rentals. This type is intended for individuals who need occasional access to a car but do not want the lengthy responsibilities that come with ownership. It provides a useful and hassle-free substitute, broadening the range of options available in the vehicle rental industry.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Market Opportunities | The increased in internet penetration will create lucrative opportunities for the growth of the car rental market |
| Market Dynamics | The increased adoption of car rental software by key market players is driving the growth of the market |
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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