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The automotive rental and leasing market size is estimated to grow by USD 122.9 billion at a CAGR of 6.35% between 2023 and 2028. The market is experiencing significant growth due to the increasing trend of urbanization and industrialization. Self-driving vehicles are gaining traction and are expected to revolutionize the industry, offering convenience and cost savings to consumers. The trend of digitization is also creating a huge impact, with online platforms and digital applications simplifying the leasing process and providing greater transparency and flexibility. Additionally, the shift towards electric and hybrid vehicles is driving demand for leasing options that cater to this emerging market. Overall, the car leasing market is poised for robust growth in the coming years, driven by these key trends and advancements in technology.
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The Automotive Rental and Leasing Market is a significant sector that caters to the demand for short-term use of various vehicles, including cars, trucks, vans, utility trailers, recreational vehicles, and electric vehicles. Sole traders and businesses alike utilize this market for their transportation needs. The market has been growing due to several factors, such as the e-commerce industry's rise, big data, and blockchain technology's integration. On-demand taxi services, tourism industry, smart cities initiatives, urbanization, and public transportation system inadequacies also contribute to the market's growth. Revenue losses due to vehicle repairs and maintenance are mitigated through lease and rental agreements with lenders. These agreements outline the terms and conditions, including insurance coverage, for the use of rental cars. Daily car hire and rental companies offer various options for customers, including short-term and long-term agreements. The market's future looks promising with the increasing trend of electric vehicles and the integration of customer service and on-demand services. However, challenges such as revenue losses due to vehicle downtime and maintenance costs persist. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growing urbanization and industrialization boost market growth is notably driving market growth. The global economy's expansion has led to advancements in infrastructure, making transportation and logistics crucial elements in driving industrialization and urbanization. Commercial vehicles, including compact cars for city hopping and heavy-duty trucks for long-distance driving and off-road trips, have significantly contributed to this development. Renting and leasing have become popular options for businesses and individuals to access these vehicles without the need for ownership. A Vehicle Leasing Agreement outlines the terms and conditions of the lease, including monthly fees, equity contributions, mileage limits, and TSP Car specifications. Heavy trucks, in particular, have been instrumental in supporting industrial growth due to their high payload capacities. Construction projects and shipping activities have boosted demand for high-performance vehicles, making rentals and leasing an attractive solution for businesses and individuals alike. Thus, such factors are driving the growth of the market during the forecast period.
The robust growth of travel and tourism industry is the key trend in the market. The travel and tourism industry, one of the world's largest and fastest-growing sectors, experienced a significant downturn in 2021 due to the COVID-19 pandemic. Governments worldwide imposed travel restrictions and lockdowns to contain the spread of the virus, negatively impacting the industry. However, the initiation of COVID-19 vaccination drives and the resumption of domestic travel activities have led to a recovery in the sector. As a result, more individuals are opting for personal vehicles for their vacations instead of public transportation. Consequently, the global automotive rental and leasing market is anticipated to experience substantial growth during the forecast period. Individuals engage in various activities such as compact city hopping, long-distance driving, and off-road trips, making renting or leasing a vehicle a convenient option. A vehicle leasing agreement typically involves a monthly fee, equity contribution, mileage limits, and a TSP Car return condition. Thus, such trends will shape the growth of the market during the forecast period.
The lack of awareness in tier two cities is the major challenge that affects the growth of the market. The automotive rental and leasing market has seen significant growth in recent years, particularly in urban areas where compact city hopping is common. However, penetration into semi-urban and rural markets remains limited. In developing nations like India, China, and Indonesia, car ownership is often viewed as a symbol of status, making renting or leasing a car an unpopular choice. Moreover, customers in these areas may find the terminology associated with leasing agreements, such as monthly fees, equity, mileage limits, and vehicle leasing agreements, confusing and inaccessible. These factors hinder the expansion of the automotive rental and leasing market, particularly in tier-2 cities and beyond. Despite the challenges, the potential for growth is substantial, and companies offering TSP Car rentals or leasing services could tap into this untapped market by simplifying their lease agreements and making them more comprehensible to a wider audience. Hence, the above factors will impede the growth of the market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Al Futtaim Group Co. - The company offers automotive rental and leasing services through its subsidiaries such as Hertz, Al Futtaim Vehicle rentals, Firefly and Thrifty rental car.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The passenger car rental segment is estimated to witness significant growth during the forecast period. The automotive rental and leasing market encompasses the rental and leasing of various types of vehicles, including cars, trucks, vans, utility trailers, recreational vehicles, and electric vehicles. With the rise of e-commerce and big data, the industry has seen significant changes, such as on-demand taxi services and the integration of blockchain technology for secure transactions.
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The passenger car rental segment accounted for USD 110.3 billion in 2018. The tourism industry, particularly hard hit by revenue losses due to shutdowns and social distancing measures, has also impacted the market. The shift towards working from home and urbanization has led to a decline in the use of public transportation systems, making personal vehicles more appealing. A lease agreement is a contract between a lender and a renter, outlining the terms of the vehicle's use, including repairs and maintenance. Rental agreements, such as daily car hires from a rental company, require payment details, make, model, number plate, colour, seats, and duration. Insurance is a crucial aspect of any car rental agreement, and the renter is often responsible for covering the cost. Smart cities initiatives aim to improve transportation systems and reduce traffic congestion, which could potentially benefit the automobile rental industry. However, the make and model of the vehicle, as well as its colour and seats, can significantly impact demand. The rental company must ensure that the vehicles are well-maintained and in good condition to attract customers.
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North America is estimated to contribute 30% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The automotive rental and leasing market encompasses the rental and leasing of various types of vehicles, including cars, trucks, vans, utility trailers, recreational vehicles, and electric vehicles. With the rise of e-commerce and big data, on-demand taxi services have gained significant traction, leading to increased demand for rental cars. The tourism industry, too, contributes significantly to the market's growth. However, recent events such as revenue losses, shutdowns, social distance, and working from home have impacted the industry. Smart cities initiatives and urbanization are driving the demand for public transportation systems, which may affect the rental market. Lease agreements between the lender and the renter outline the terms for the use of the vehicle, including repairs and maintenance. Rental agreements detail the duration, payment details, make, model, number plate, colour, seats, and other specifications. Insurance is an essential component of the car rental agreement. The market's growth is influenced by various factors, including customer service and the increasing popularity of electric vehicles.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion " for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The market encompasses the rental and leasing of various types of vehicles, including cars, trucks, vans, utility trailers, recreational vehicles, and electric vehicles. E-commerce platforms have significantly impacted this industry, allowing customers to easily book rental cars and even on-demand taxi services. Big data and blockchain technology are also transforming the sector by providing valuable insights and ensuring secure transactions. The market has been affected by various factors such as revenue losses due to shutdowns and social distance measures during the pandemic. However, urbanization, smart cities initiatives, and the public transportation system's inadequacy have fueled the demand for personal vehicles. A rental agreement is a contract between a renter and a rental company, outlining the terms and conditions of the rental period. The lease agreement, on the other hand, is a long-term contract between a lender and a lessee, allowing the lessee to use a vehicle for an extended period in exchange for regular payments. When renting a vehicle, customers provide details such as the make, model, number plate, colour, seats, duration, and payment details. Rental cars undergo regular repairs and maintenance to ensure they are in good condition for customers. Insurance is also a crucial aspect of the car rental agreement. In conclusion, the Automotive Rental and Leasing market continues to evolve, adapting to changing customer needs and technological advancements. Whether it's a daily car hire or a long-term lease agreement, the industry aims to provide a seamless and convenient experience to its customers.
Market Scope |
|
Report Coverage |
Details |
Page number |
135 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.35% |
Market growth 2024-2028 |
USD 122.9 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.58 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 30% |
Key countries |
US, China, Germany, UK, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Al Futtaim Group Co., Aspark Holidays Pvt. Ltd., Avis Budget Group Inc., Carzonrent India Pvt. Ltd., Centauro Rent a Car S.L.U., DriiveMe Ltd., Drivezy India Travels Pvt. Ltd., Enterprise Holdings Inc., Europcar Mobility Group SA, Expedia Group Inc., Getaround Inc., Green Motion International, Hertz Global Holdings Inc., Localiza Rent a Car SA, Mercedes Benz Group AG, Turismo Gargo SA de CV, Movida Participacoes SA, OK Group, SIXT SE, and Zoomcar India Pvt. Ltd. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for market forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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