The car rental market involves renting automobiles for short periods of time, generally ranging from a few hours to a few weeks. Car rental services provide mobility solutions for various purposes including vacations, official trips, airport transport, and others. Rental cars come with various features and models based on user needs and budgets. The vast mileage coverage without incurring large ownership costs makes car rentals popular and affordable. 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 6.1% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Various factors such as high costs of private vehicle maintenance and operations, parking issues in crowded cities, and increased preference for on-demand mobility have accelerated the popularity of ride hailing options. It is estimated that over 20% of urban drivers will give up private car ownership over the next five years and opt for alternative mobility solutions. This provides car rental companies an opportunity to partner with major ride hailing platforms and offer their fleet on rental basis. Leveraging the vast network and demand for ride hailing can help car rental providers witness higher fleet utilization while capturing a widening consumer base. Focusing on the emerging preference for shared and on-demand mobility presents lucrative prospects for growth of the car rental market over the forecast period.
Threat of new entrants: The car rental market requires significant capital investment to purchase large car fleets. Established players such as Europcar, Hertz, and Avis Budget have strong brand recognition and global presence which acts as a deterrent for new players.
Bargaining power of buyers: Individual customers have low bargaining power due to availability of standardized rental packages. However, large corporate clients can negotiate on price and services.
Bargaining power of suppliers: A few major automakers such as Toyota, Volkswagen, and General Motors dominate car manufacturing. This gives them substantial influence in dictating prices and contractual terms to rental companies.
Threat of new substitutes: Alternate mobility options like ride-hailing and car-sharing pose a threat, especially in densely populated urban areas.
Competitive rivalry: The market is highly competitive with top players competing on factors like pricing, fleet size, location network, and service quality.
Strengths: Well-established brands, global presence, diversified fleet with luxury and economy car options.
Weaknesses: High fixed costs, dependency on discretionary consumer spending, susceptibility to economic cycles.
Opportunities: Expand into emerging markets, offer newer business models like subscription and peer-to-peer rentals.
Threats: Regulatory risks like emission norms, rising interest rates could impact profitability.
The Global Car Rental Market is expected to witness high growth supported by increasing mobility needs, rising tourism, and preference for rental over ownership.
Regional Analysis: North America currently dominates the market owing to robust economic growth and well-developed rental infrastructure. Key regional markets include the U.S., Germany, France, and China.
Key players operating in the car rental market are Nobel Biocare Services AG, DIO Corporation, Ivoclar Vivadent AG, GC Dental, Modern Dental Group Limited, COLTENE Group, SHOFU Dental GmbH, VITA Zahnfabrik, Holmes Dental Co., Lasak, Institut Straumann AG, Derby Dental, and Anthogyr SAS. These companies are focused on expanding their global fleet size and service networks. New offerings around subscription models and peer-to-peer rentals are also gaining traction.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it