The car rental market accounted for USD 92.02 billion in 2021, and it is expected to reach USD 139.65 billion by 2027, projecting a CAGR of more than 7% during the Forecasts period.
The COVID-19 pandemic has devastated economies worldwide, and the impact was felt by businesses across verticals and hit transportation services particularly hard. The challenges that emerged from the worldwide lockdown are immense and insurmountable in many areas. With reduced global air traffic, the demand for rental cars has slowed down at airports as there were travel restrictions across the world to contain the spread of the virus. Also, the rising prices of petrol and diesel in developing countries are likely to hamper the growth of the market during the Forecasts period.
The global crisis has merely accelerated the adoption of rental cars. However, post-pandemic, with safety and hygiene becoming the need of the hour, practices for disinfecting cars are followed meticulously. The need for individual mobility and the social distancing norms are bound to improve the industry conditions. The subscription model has become the face of the car rental industry in recent times since this model allows the customer to enjoy temporary ownership of the vehicle without worrying about additional costs such as maintenance and insurance premiums etc.
The market in North America is expected to dominate the global market in terms of revenue, and it is expected to continue its dominance over the Forecasts period. This can be attributed to the increasing number of business trips and local and international vacation trips across various countries in this region.
The market in Asia-Pacific is expected to register significant growth in terms of CAGR over the Forecasts period, owing to increasing travel and tourism and increasing availability of high-end luxury and economy vehicles, especially across developing countries in this region.
Technology is a critical component expected to boost the market over the Forecasts period. Increased adoption of information technology is transforming the industry and enabling operators to deliver improved services to their customers. This includes the utilization of optimized corporate and customer information management and the development of convenient internet booking applications.
For instance, the order online or pick-up model is at the forefront of identifying applications for beacons and near field communications (NFC). Newer players, like Zipcar and BlaBlaCar, are benefiting from using innovative business models such as car-sharing and adopting technologies such as telematics. Uber and Lyft are using mobile technologies and devices to better meet consumers’ personal transportation needs. These initiatives are contributing to the disruption of the car rental industry.
Currently, online booking also serves a variety of purposes, such as verification of documents of the renter, offering information to the renter regarding the car, services like drop and pick-up of the rented car at a certain place, e-signing contracts, and cashless transactions.
Smartphone sales are another major factor propelling the market. The rising dependence of users on smartphones for carrying out a variety of activities traditionally done by personal computers has significantly helped transform the car rental experience for customers. This is further enhanced by the increased availability of comprehensive demand-oriented mobility solutions. Industry players such as Sixt SE, Uber, and Avis have launched their mobile apps through which customers can easily choose vehicles from a portfolio and carry out bookings.
North America led the overall market in 2019, and it is expected to retain its dominance over the Forecasts period. The rising number of leisure and business trips across the region, both locally and internationally, is among the prominent factors influencing the growth of the regional market. Additionally, a continuous shift in consumer preference toward rental services and the presence of prominent service providers in the region like Avis Budget Group and Enterprise Rent-a-Car are expected to accelerate the revenue generation prospects.
North America is expected to be the largest car rental market globally during the Forecasts period, as the United States continues to remain the largest country for car rental services. Recently, the usage of these services increased in several cities, fueled by increased initiatives by service operators. For instance, Uber Technologies Inc. adopted mobile technologies and other devices to meet consumers’ personal transportation requirements more efficiently.
This growth in revenue share can be primarily attributed to the increased usage of car rental services in the United States, the rising adoption of electric cars, and growing concerns and awareness of lower emissions among consumers in the region.
The market is moderately fragmented, with numerous international and domestic companies operating across the world. However, the industry is on the verge of consolidation, with few players capturing a major market share. Key participants include Enterprise Rent-A-Car, The Hertz Corporation, Sixt SE, Europcar, and Avis Budget Group. The primary focus of these players is on enhancing their services to gain a customer base and maximize profitability.
For instance, Sixt SE has launched a smartphone app allowing company car drivers to manage everything related to their contract at the push of a button.
From March 2021, the car rental firm Hertz introduced an annual membership fee for its 24/7 service that allows members contactless rental of cars and vans.
Collaboration is another key strategy implemented by industry players to strengthen their positions in the market. For instance, in May 2021, Uber launched a new car rental service called Uber Rent in partnership with the Dublin-based car rental company CarTrawler. The partnership will see CarTrawler run Uber's car rental technology, which is being rolled out across the United States.
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The COVID-19 pandemic has devastated economies worldwide, and the impact was felt by businesses across verticals and hit transportation services particularly hard. The challenges that emerged from the worldwide lockdown are immense and insurmountable in many areas. With reduced global air traffic, the demand for rental cars has slowed down at airports as there were travel restrictions across the world to contain the spread of the virus. Also, the rising prices of petrol and diesel in developing countries are likely to hamper the growth of the market during the Forecasts period.
The global crisis has merely accelerated the adoption of rental cars. However, post-pandemic, with safety and hygiene becoming the need of the hour, practices for disinfecting cars are followed meticulously. The need for individual mobility and the social distancing norms are bound to improve the industry conditions. The subscription model has become the face of the car rental industry in recent times since this model allows the customer to enjoy temporary ownership of the vehicle without worrying about additional costs such as maintenance and insurance premiums etc.
The market in North America is expected to dominate the global market in terms of revenue, and it is expected to continue its dominance over the Forecasts period. This can be attributed to the increasing number of business trips and local and international vacation trips across various countries in this region.
The market in Asia-Pacific is expected to register significant growth in terms of CAGR over the Forecasts period, owing to increasing travel and tourism and increasing availability of high-end luxury and economy vehicles, especially across developing countries in this region.
Key Market Trends
Increasing Demand for Online Car Rental Services
Technology is a critical component expected to boost the market over the Forecasts period. Increased adoption of information technology is transforming the industry and enabling operators to deliver improved services to their customers. This includes the utilization of optimized corporate and customer information management and the development of convenient internet booking applications.
For instance, the order online or pick-up model is at the forefront of identifying applications for beacons and near field communications (NFC). Newer players, like Zipcar and BlaBlaCar, are benefiting from using innovative business models such as car-sharing and adopting technologies such as telematics. Uber and Lyft are using mobile technologies and devices to better meet consumers’ personal transportation needs. These initiatives are contributing to the disruption of the car rental industry.
Currently, online booking also serves a variety of purposes, such as verification of documents of the renter, offering information to the renter regarding the car, services like drop and pick-up of the rented car at a certain place, e-signing contracts, and cashless transactions.
Smartphone sales are another major factor propelling the market. The rising dependence of users on smartphones for carrying out a variety of activities traditionally done by personal computers has significantly helped transform the car rental experience for customers. This is further enhanced by the increased availability of comprehensive demand-oriented mobility solutions. Industry players such as Sixt SE, Uber, and Avis have launched their mobile apps through which customers can easily choose vehicles from a portfolio and carry out bookings.
North America is the Market Leader
North America led the overall market in 2019, and it is expected to retain its dominance over the Forecasts period. The rising number of leisure and business trips across the region, both locally and internationally, is among the prominent factors influencing the growth of the regional market. Additionally, a continuous shift in consumer preference toward rental services and the presence of prominent service providers in the region like Avis Budget Group and Enterprise Rent-a-Car are expected to accelerate the revenue generation prospects.
North America is expected to be the largest car rental market globally during the Forecasts period, as the United States continues to remain the largest country for car rental services. Recently, the usage of these services increased in several cities, fueled by increased initiatives by service operators. For instance, Uber Technologies Inc. adopted mobile technologies and other devices to meet consumers’ personal transportation requirements more efficiently.
This growth in revenue share can be primarily attributed to the increased usage of car rental services in the United States, the rising adoption of electric cars, and growing concerns and awareness of lower emissions among consumers in the region.
Competitive Landscape
The market is moderately fragmented, with numerous international and domestic companies operating across the world. However, the industry is on the verge of consolidation, with few players capturing a major market share. Key participants include Enterprise Rent-A-Car, The Hertz Corporation, Sixt SE, Europcar, and Avis Budget Group. The primary focus of these players is on enhancing their services to gain a customer base and maximize profitability.
For instance, Sixt SE has launched a smartphone app allowing company car drivers to manage everything related to their contract at the push of a button.
From March 2021, the car rental firm Hertz introduced an annual membership fee for its 24/7 service that allows members contactless rental of cars and vans.
Collaboration is another key strategy implemented by industry players to strengthen their positions in the market. For instance, in May 2021, Uber launched a new car rental service called Uber Rent in partnership with the Dublin-based car rental company CarTrawler. The partnership will see CarTrawler run Uber's car rental technology, which is being rolled out across the United States.
Additional Benefits:
- The market estimate (ME) sheet in Excel format
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Table of Contents
1 INTRODUCTION
4 MARKET DYNAMICS
5 MARKET SEGMENTATION
6 COMPETITIVE LANDSCAPE
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- Avis Budget Group Inc.
- Hertz Global Holdings Inc.
- Enterprise Holdings Inc.
- Sixt SE
- Fast Rent a Car
- Bettercar Rental
- Europcar Mobility Group
- Shenzhen Topone Car Rental Co. Ltd
- China Auto Rental
- TT Car Transit
- Renault Eurodrive
Methodology
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