Car Rental Market Research, 2027
The global car rental market size was valued at $92.92 billion in 2019 and is projected to reach $214.04 billion by 2027, registering a CAGR of 10.7% from 2020 to 2027. North America accounted for the highest share in the global car rental market in 2019, in terms of revenue, and LAMEA is anticipated to exhibit remarkable growth rate during the forecast period.
Car rental or car hire agencies are agencies that rent automobiles for a short period of time at certain cost. This service is often organized with many local branches, which are generally located near airports or busy areas in the city and are complemented by a website to allow online reservations. With growth in pollution levels and population, the car rental industry has experienced a drastic transformation over the past few years, becoming one of the most prominent industries in fleet transportation. Manufacturers and consumers rely on various car rental schemes that are cost-effective, such as leasing cars from their owners for a period of three years and then putting these cars on rent through app-based bookings. In addition, car rentals majorly help curb the pollution level by reducing volumetric sales of owned vehicles. Moreover, with an increase in air traffic and growth in the trend of online car booking, car rentals are the preferred options for travel, as cars are the most economical and faster modes of transportation. These advantages promote growth of the car rental industry at an exponential rate.
Factors such as rise in trend of on-demand transportation services and low rate of car ownership among millennials drive growth of the car rental market. However, low rate of internet penetration in developing regions hampers the market growth. Further, adoption of car rental management software is anticipated to provide lucrative growth opportunities for the players operating in the car rental market.
The global car rental market is segmented on the basis of application, rental category, vehicle type, and region. By application, it is classified into leisure and commercial. By rental category, it is divided into on-airport and off airport. On the basis of vehicle type, it is categorized into luxury car, executive car, economical car, sports utility vehicle (SUV), and multi utility vehicle (MUV). Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The car rental industry in North America exhibited lucrative growth over past few years. Factors such as lack of route flexibility in public transportation and need for greener environment results in shift of driven commuters to rental vehicles, which, in turn, drives market growth and is anticipated to offer growth opportunities for the players operating in the North America car rental market.
The car rental industry in the U.S. is anticipated exhibit remarkable growth during the forecast period. In addition, there are a number of car rental agencies besides the market leaders, which contributes to the revenue, namely, Dollar Thrifty, Rent-A-Car, Budget, and Vanguard. Further, the car rental industry in the U.S. is highly consolidated, which, in turn, puts potential new consumers at a is advantage, in terms of cost as they face high input costs. Moreover, Leading automobile manufacturers are incorporating car rental services in Canada, which is an effort to attract customers that are hesitant to own a vehicle. For instance, on February 24, 2020, Hyundai Canada announced Hyundai for Hire, a car rental pilot project that intends to offer lucrative incentives to customers to rent vehicles from the company for short term.
By Application
Commercial segment is projected as the most lucrative segments
Key Market Players
Key player profiled in the report includes Avis Budget Group, Inc, EuropeCar, Enterprise Holdings, Inc., Hertz System, Inc., Localiza, Sixt, Carzonrent India Pvt Ltd., Eco Rent a Car, ANI Technologies Pvt. Ltd., and others.
Key Developments:
- In February 2020, Sixt, one of the leading providers of high-quality mobility services is expanding network of stations in Central Asia and incorporating new locations at Uzbekistan.
- In November 2019, Europcar Mobility Group acquired Fox Rent A Car, one of the players in the U.S. car rental market. In addition, this acquisition would strengthen Europecar's ability to provide services to the customers on a global scale.
- In October 2019, Avis Budget Group renewed the multi-year agreement for extending its relationship as exclusive car rental provider for AARP members. This partnership is expected to provide AARP members with discounted rates and special offers.
- In May 2019, Sixt SE incorporated car sharing services in Munich after Berlin and Hamburg. In addition, the customers in Munich can not only opt for traditional car rental but also use a vehicle for short period of time.
Rise intrend of on-demand transportation services
On demand services include taxis, passenger vehicles, and charter vehicles with flexibility and other features such as real time feedback, tracking of vehicles, and rating to end customers. The availability of cars and comparison of fare with the correspondent car rental companies is facilitated by numerous mobile applications. For instance, in August 2017,Migo, a Seattle-based search engine for on-demand ride services launched a mobile application that allows users to compare locations and prices of nearby taxi, car-sharing, and ride-hailing companies all in one app. Moreover, such car rental services allow customers to make use of numerous functions. Thus, rise in trend of on-demand transportation services is driving the growth of car rental market.
By Rental Category
On airport segment is projected as the most lucrative segments
Low rate of car ownership among millennials
There is a lower rate of car ownership of among millennials owing to high cost of maintenance cost of personnel car .In addition, advantages of millennial are inclined towards car rental owing to its advantages such as cost cutting and fuel economy. Rise in demand for ride hailing services and facilities such as car rental, car sharing, and station-based mobility have reduced private car ownership by 80% in developed countries. For instance, the number of passenger vehicles on American roads is expected to reduce from $247 million to $44 million in 2030, owing to increase in use of electric ride share services. Furthermore, buying a new car and maintaining it is costlier than renting a vehicle on a yearly basis. Thus, gradual penetration of such car ownership (4% in developing countries) per year is estimated to fuel its demand across the globe in the coming years. Hence, lower rate of car ownership among millennials drives the growth of car rental market.
By Vehicle Type
Sports utility vehicle (SUV) segment is projected as the most lucrative segments
Low rate of internet penetration in developing regions
Generally, car rental and ride hailing services require three parties for their operation i.e. drivers, riders, and service providers. All the process such as matching rider with drivers, fare estimation & calculation, ride payment, and reputation management are done by using smartphones with mandatory internet connectivity. Some countries such as Eritrea, Burundi, Chad, and Somalia have low penetration of internet that threatens the growth of the ride hailing market in such regions. A ride driver must have a GPS equipped smartphone that have active internet connection to identify the exact pickup and drop location of customers. Therefore, such low penetration of internet in some regions hampers the car rental market globally.
By Region
LAMEA region segment is projected as the most lucrative segments
Adoption of car rental management software
The car rental market is growing rapidly on a global level. Many leading players have already entered the market and acquired remarkable position in the market, however there is still scope for other players. All the players operating in the market are taking initiatives to provide better offers and services to get more bookings, by improving their operations and adopting new automated technologies. In addition, to provide better services and automate their business, car rental players are using car rental management software. The car rental management software minimizes the task of management and boosts the efficiency of operation. Further, management software also provides features such as fleet optimizations, advanced pricing management, and custom reports, which, in turn, helps car rental companies to grow their business. Thus, adoption of car rental management software holds a remarkable growth opportunity for the car rental market players for market expansion.
Key Benefits For Stakeholders
- This study presents the analytical depiction of the global car rental market analysis along with the current trends and future estimations to depict the imminent investment pockets.
- The overall car rental market opportunity is determined by understanding the profitable trends to gain a stronger foothold.
- The report presents information related to key drivers, restraints, and opportunities of the global car rental market with a detailed impact analysis.
- The current car rental market is quantitatively analyzed from 2019 to 2027 to benchmark the financial competency.
- Porter’s five forces analysis illustrates the potency of buyers and suppliers in the industry.
Car Rental Market Report Highlights
| Aspects | Details |
 By Application |
|
 By Rental Category |
|
 By Car Type |
|
 By Region |
|
 Key Market Players | Carzonrent India Pvt Ltd., Hertz System, Inc., Enterprise Holdings Inc, Localiza, Europcar, ANI Technologies Pvt. Ltd. (OLA TAXI’S), Uber Technologies, Inc., SIXT, Eco Rent a Car, Avis Budget Group |
Analyst Review
Car rental market exhibited lucrative growth over past few years. Lack of route flexibility in public transportation and need forgreener environment results in shift of commuters to rental vehicles, which, in turn,propels the market growth and is anticipated to offer growth opportunities for the players operating in the car rental industry.
Factors such as rise intrend of on-demand transportation services and low rate of car ownership among millennials are drivegrowth of the car rental market. However, low rate of internet penetration in developing regions hindersthe market growth. Further, adoption of car rental management software is anticipated to provide lucrative growth opportunities for the players operating in the car rental market.
Among the analyzed regions, North America is expected to account for the highest revenue in the global market throughout the forecast period, followed by Europe, Asia-Pacific, and LAMEA. Moreover, LAMEA is expected to witness the highest growth rate, owing to growth in thetourism industry.
What is the total market value of car rental report? Based on application, the leisure segment holds share of around 55%, while commercial segment holds a around 45% share in global car rental market.
The market is analyzed from the year 2019 to 2027 where 2020-2027 is the forecast period.
The global car rental market generated revenue worth $92,920.1 million in 2019 and is projected to reach $214,041.4 million by 2027, to register a CAGR of 10.7 % during the forecast period
2019 is base year calculated in the car rental report
The companies that holds a significant share in the global car rental market, are selected in the report.
Tthe top companies that holds the market share in car rental market are Avis Budget Group, Inc, EuropeCar, Enterprise Holdings, Inc., Hertz System, Inc., Localiza, Sixt, Carzonrent India Pvt Ltd., Eco Rent a Car, ANI Technologies Pvt. Ltd.
Based on rental category, the on airport segment is the most influencing segment growing in the car rental report.
Avis Budget Group, Inc, EuropeCar, Enterprise Holdings, Inc., Hertz System, Inc., Localiza, Sixt, Carzonrent India Pvt Ltd., Eco Rent a Car, ANI Technologies Pvt. Ltd., and others are some of the service providers of car rental industry.
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