Car rentals provide flexible mobility solutions by offering inexpensive and hassle-free mobility options compared to vehicle ownership. Renters can avail well-maintained vehicles as per their duration of travel from car rental service providers.
The global Car Rental Market is estimated to be valued at US$ 133.23 Bn in 2023 and is expected to exhibit a CAGR of 2.9% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
On-demand car rental services have emerged as a key trend in the car rental market. With the growing adoption of smartphones and increasing connectivity, users can book and unlock cars through mobile apps for short durations ranging from minutes to weeks. This allows customers to access vehicles conveniently without needing to visit rental counters. Major car rental companies are partnering with ride-hailing platforms to integrate their fleets onto the platforms and expand their customer base. This has boosted the availability of vehicles and reduced wait times. The on-demand model enables optimized fleet utilization, appeals to casual users, and is a sustainable option. As a result, on-demand car rentals are expected to drive significant growth in the market over the forecast period.
Strength: Car rental companies have large fleets of vehicles available in various locations which provide customers with great access and flexibility. Having diversified fleet and global presence helps cater to varying customer needs.
Weakness: Fierce competition from peer companies and alternative modes of transport pressure margins. Higher operational and maintenance costs associated with large fleets reduces profitability. Companies are dependent on vehicle manufacturers for supplies and prone to fluctuations in new vehicle prices.
Opportunity: Growth in tourism and business travel presents new customers. Advances in mobility technologies like electric vehicles and self-driving cars will open new revenue streams. Partnerships with cab aggregators and shared mobility firms allows leveraging existing networks.
Threats: Economic downturns and natural calamities impact travel demand adversely. Strict emission norms and policies discourage personal vehicle usage favoring public transport. Emergence of alternative ownership models like vehicle leasing threatens traditional rental business.
Global Car Rental Market Size is expected to witness high growth over the forecast period supported by revival of tourism and business travel post pandemic.
The Asia Pacific region is projected to be the fastest growing regional market for car rentals due to rising household incomes, rapid urbanization, and increasing tourism in countries like India and China. Countries like Australia, Japan and South Korea also contribute significantly to regional market growth.
Key players operating in the car rental market are Avis Budget Group, Enterprise Holdings, Europcar Mobility Group, Hertz Global Holdings, and Sixt SE. These companies are focusing on fleet diversification, expanding into new markets, leveraging digital platforms, and partnerships for gaining market share.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it