Car Rental Market Overview
Car Rental Market Size was valued at USD 107.5 billion in 2022. The Car Rental 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 (2022 - 2030). Auto rental is the service of renting automobiles for a set period of time through online or offline channels.
Car rental 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
Car Rental Service Market Trends
Budget car rental services growth in the travel and tourism industry across the globe
One of the key factors driving the growth of the car rental 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 market growth. In line with this, people are turning to budget car rental 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 car rental 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 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 car rental 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 Car Rental 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 car rental 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 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 market players prefer economy cars for car rental 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 Car Rental 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 market growth. As a result, the increased demand for airport car rental 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 car rental 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 market growth. Trips to North American cities such as New York, Los Angeles, Chicago, San Francisco, and Las Vegas are also helping the car rental 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 car rental 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 car rentals 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
- Enterprise Holdings Inc.
- The Hertz Corporation
- Toyota Rent-a-Car
- Sixt SE
- Alamo Rent-a-Car LLC
- Carzonrent India Pvt Ltd
- ANI Technologies Pvt. Ltd
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 car rental 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.
- February 2023: 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.
- February 2022 In its Series A funding round, UFODrive raised $19 million USD. Hertz and Certares, a private equity firm, are the primary investors. Hertz intends to operate its global electric car fleet using UFODrive's digital rental and fleet management
- February 2022 Udrive, the UAE's homegrown brand offering pay-per-minute car rental, has completed another strong funding round with USD 5 million from Cultiv8 and Oman Holding International. The investment will help Udrive with its upcoming regional expansion and technological advancements.
Car Rental Market Segmentation
Rental Cars Booking type Outlook
- Offline Booking
- Online Booking
Rental Cars Duration Outlook
Rental Cars Vehicle Type Outlook
Car Rental Solution Application Outlook
Rental Cars End User Outlook
Car Rental Service Market Regional Outlook
- North America
- Rest of Europe
- South Korea
- Rest of Asia-Pacific
- Rest of the World
- Middle East
- Latin America
|Market Size 2021
||USD XX Billion
|Market Size 2022
||USD 107.5 Billion
|Market Size 2030
||USD 200.4 Billion
|Compound Annual Growth Rate (CAGR)
||2018 & 2020
||Value (USD Billion)
||Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
||Booking Type, Rental Duration, Vehicle Type Application, and Region
||North America, Europe, Asia Pacific, and Rest of the World
||The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil
|Key Companies Profiled
||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
|Key Market Opportunities
||The increased in internet penetration will create lucrative opportunities for the growth of the car rental market
|Key Market Dynamics
||The increased adoption of car rental software by key market players is driving the growth of the market
Frequently Asked Questions (FAQ) :
Car rental market is estimated at USD 107.5 Billion.
U.S Market is estimated 633.6 USD million
8.1% is the growth rate of car rental market.
North America region held the largest market share in the car rental market.
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 are key players in the market.
Online Booking Type led the car rental market.
Self-driven application had the largest market share in the car rental market.
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