CAR RENTAL MARKET ANALYSIS
Car Rental Market, By Category (Intercity/Local Usage, On-Airport, Intra-City/Outstation, Others), By Car Type (Luxury Cars, Executive Cars, Economy Cars, SUV's, MUV's), and By Region (North America, Europe, Asia Pacific, Rest of the World) - Size, Share, Outlook, and Opportunity Analysis, 2020 – 2027
Car rental service is a hire car agency that enables the customer to rents automobiles at affordable rates. This agency is usually located near airports and busy city areas. Car rental services are mainly opted by people who require a vehicle for the temporary and who do not want to own a car. Moreover, car rental services are also ideal for owners of damaged vehicles and looking for repair or insurance compensation. Furthermore, car rental services also provide additional benefits such as navigation systems, entertainment systems, portable Wi-Fi, insurance, and child safety seats.
The global car rental market is projected to surpass US$ 220.0 billion by the end of 2027, in terms of revenue, growing at CAGR of 13.6% during the forecast period (2020 to 2027).
Drivers
The advantage such as easy booking via online service is a major factor fueling the market growth of the car rental. Car rental service offers to book online which has made them easy booking. This is attributed to the increasing penetration of smartphones and the rising use of internet around the globe. Moreover, online booking also offers various discounts and schemes which is further expected to augment the market growth of the car rental.
The rapid growth of GDP rates in the developing countries is expected to drive the market growth of the car rental. This is attributed to the increasing per capita income of the consumers in the region. Moreover, improvement in the car rental service such as the easy renting process and other benefits offered is also expected to contribute to the market growth of the car rental over the forecast timeframe.
Regionally, North America dominated the global car rental market in 2019, reporting 36% market share in terms of revenue, followed by Europe and Asia-pacific, respectively.
Figure 1. Global Car Rental Market, Revenue Share (%), By Region, 2019
Market Restraints
Fluctuating prices of crude oil due to the gap between demand and supply is projected to restrict the market growth of the car rental over the forecast period.
The low cost of public transportation services such as buses and trains is expected to hamper the market growth of the car rental. According to the Coherent Market Insights analysis, the average cost of a taxi in Los Angeles, North America is US$ 1.80/km and that of a bus is US$ 1.50/km.
Market Opportunities
An increasing number of car rental services around the globe is projected to offer enormous growth opportunities to the market for car rental. The c coupled with the increasing number of travelers around the globe is also projected to accelerate the market growth of the car rental. The growing production of automobiles is another major factor contributing to the market growth of car rental.
Improved road infrastructure across emerging economies and rising number of leisure and business trips is projected to provide potential opportunities to the market of car rental. Growing adoption of information technology across the industry in order to deliver efficient service and strengthening their regional as well as global presence is projected to shape the market growth over the forecast period.
Figure 2. Global Car Rental Market – Opportunity Analysis
Market Trends
Various industry players are introducing mobile apps for the customer in order to ease the booking and allow the consumer to choose the vehicle of their choice from the portfolio. For instance, in February 2020, Share Car, a car-sharing service based in Indonesia, has introduced its new car sharing app. The app can be installed on both Apple iOS and Android smartphones. Thus, the increasing launch of such apps is expected to augment the market growth.
The rising trend of sharing cars among consumers is expected to bolster the market growth of the car rental. For instance, in October 2019, Ola introduced a new car-sharing service Ola Drive for building a holistic shared mobility landscape in India. It was initially introduced in Bengaluru, later will expand its availability to Hyderabad and Delhi.
Figure 3. Global Car Rental Market, Revenue Share (%), By Car Type, in 2019
On the basis of car type, economy cars dominated the global car rental market in 2019 with around 31% of market share in terms of revenue, followed by executive cars and fast luxury cars, respectively.
Global Car Rental Market - Impact of Coronavirus (Covid-19) Pandemic
Companies across the globe are increasingly asking the employees for working from home, which has led to reduction of commute in the cities and non-essential travel have descended drastically during the pandemic situation. This scenario is expected to continue to reduce the demand of car rental services across the globe. For instance, Hertz Global Holdings Inc. faced soaring cancellations and lack of new bookings. The company has been cutting off staff and reduce high capital spending to reserve liquidity.
Competitive Section
Key players are operating in the global car rental market are Enterprise Holdings, The Hertz Corporation, Avis Budget Group, Europcar Group, Carzonrent, Sixt SE, Al Futtaim Group, Localiza - Rent a Car, Eco Rent a Car, and GlobalCARS
Few Recent Developments
Sixt SE
In August 2018, Sixt SE, a European multinational car rental company, has started its operation in Uzbekistan. Sixt offer cars for rent in more than 110 countries.
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