Market Overview: The car rental market is estimated to be valued at US$ 119.28 billion in 2022 and is expected to exhibit a CAGR of 11% over the forecast period 2022-2027, as highlighted in a new report published by Coherent Market Insights. The car rental market provides ease of mobility to customers through renting cars for varied duration ranging from hours to months. Car rentals are majorly used by tourists for local commute, by business travelers for work related trips, and by others requiring temporary vehicle access.
Market Dynamics: The car rental market is primarily driven by the increasing tourism activities globally. Travel and tourism industry has been witnessing significant growth over the past few years with rising disposable incomes and increasing vacation trends. According to World Travel & Tourism Council, the global tourism GDP is expected to grow by 4% per annum outpacing the global GDP growth. Another major driver has been the corporate business travel wherein car rentals are a preferred mode of transport. Short term rentals allow flexibility to businesses to maximize productivity without additional asset ownership costs.
Market key trends: The car rental market has seen significant growth in the adoption of mobility services especially owing to the increasing popularity of ridesourcing and carsharing. New entrants in this space are offering innovative solutions like peer-to-peer carsharing which allow private car owners to rent out their vehicles when not in use. This offers greater flexibility to customers and is more affordable compared to traditional rental services. Furthermore, tech-savvy millennials are increasingly opting for mobility-on-demand services over private vehicle ownership which is driving the trend towards shared mobility.
SWOT Analysis
Strengths: Established players have large fleets of vehicles and widespread network of rental locations globally. This allows easy access and convenience for customers.
Weaknesses: High fixed costs associated with maintaining a large fleet of vehicles. Dependence on macroeconomic factors like tourism and business travel cycles.
Opportunities: Growing popularity of mobility-as-a-service provides opportunities to bundle rental cars with other transportation services. Emergence of autonomous vehicles can lower operating costs in the long run.
Threats: disruptions from new entrants offering innovative shared mobility solutions. Rising environmental concerns pose risk of stricter emissions regulations hurting fleet operational costs.
Key Takeaways
Market size: The Global Car Rental Market size was valued at US$ 119.28 billion in 2023. The market is expected to witness high growth, exhibiting a CAGR of 11% over the forecast period, driven by increasing leisure and business travel worldwide.
Regional analysis: North America currently dominates the global car rental market with the US being the largest car renting nation globally. However, the Asia Pacific region is expected to offer lucrative growth opportunities and emerge as the fastest growing regional market owing to rising incomes, rapid urbanization, and investment in travel and tourism infrastructure in countries like China and India.
Key players: Key players operating in the car rental market include Enterprise Holdings, The Hertz Corporation, Avis Budget Group, Europcar Group, Sixt SE, and Al Futtaim Group. Enterprise Holdings has the largest fleet of rental vehicles globally while Hertz and Avis are other major international brands concentrated majorly in the United States and Europe.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
