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The Car Rental Market size is forecasted to increase by USD 157.34 billion, at a CAGR of 20.47% between 2023 and 2028. The market's growth trajectory is influenced by multiple factors, foremost among them being the rising vehicle ownership costs, compelling consumers to explore alternative options such as car rental services. Additionally, the integration of advanced digital technologies into car rental services is playing a pivotal role in reshaping the industry landscape. The adoption of these technologies enhances the overall customer experience, offering convenience and efficiency. Furthermore, the burgeoning interest in self-driven vehicles represents a significant trend driving market expansion. As autonomous driving technology continues to evolve, it is expected to revolutionize the car rental sector, providing consumers with innovative and convenient transportation solutions. Together, these factors are shaping the future of the market, paving the way for sustainable growth and evolution.
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The market is driven by the rising demand for both business and leisure travel, facilitated by internet booking apps and mobile technologies. Global travel trends and the adoption of electric vehicles (EVs) are reshaping the industry. Challenges include navigating travel restrictions, managing corporate and customer information securely, and ensuring smooth operations for services like drop-off and pick-up. Incorporating technologies such as near-field communications (NFC) and telematics is crucial. However, adapting to cashless transactions and e-signing contracts presents ongoing challenges. To thrive, rental service providers must balance innovation with addressing industry-specific hurdles. The Car Rental Self-Drive market refers to the business sector where customers rent vehicles for personal use, assuming full control behind the wheel. 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 market growth is significantly driven by the increasing cost of vehicle ownership. Owning a vehicle entails various expenses, including fuel, registration, taxes, finance, maintenance, and depreciation, all contributing to the overall ownership cost. The American Automobile Association (AAA) indicates that depreciation alone accounts for 43% of ownership costs, while maintenance and fuel costs contribute 25%. In recent years, fuel and maintenance costs have witnessed a substantial rise, and this upward trend is projected to persist in the forecast period.
Additionally, urban congestion has made car ownership burdensome. The AAA reported a USD 279 increase in the average cost of owning and operating a new car in 2020 compared to 2019. Consequently, the millennial generation has shown decreased interest in car ownership due to traffic issues and escalating fuel and maintenance expenses. As a result, the rate of ownership among individuals aged between 18 and 35 has declined over time. These shifts in consumer behavior have led to a rising demand for car rental services, further fueling the growth of the market in the forecast period.
The market is witnessing a significant trend with the emergence of intermediaries. In the past, customers had to rely on telephone calls to book cars with service providers. However, the widespread availability of the internet has given rise to various online platforms known as car rental brokers. These intermediaries act as aggregators between customers and car rental operators, providing a convenient way to access rental services. Websites like carentals.com, expedia.com, cartrawler.com, and priceline.com are examples of such intermediaries.
Intermediaries offer competitive prices for car rentals, making the market highly price-driven. Customers often choose based on the best deals, resulting in commissions being payable to the brokers. Consequently, direct sales for operators become less favorable compared to sales through intermediaries. Moreover, using intermediaries can pose challenges in brand differentiation, as customers interact with the intermediary rather than the operator directly. These trends are expected to have a potential impact on the market's growth during the forecast period.
The growing popularity of car-sharing services presents a potential challenge to the market's growth. Car sharing has become a trend in mobility, driven by the aim to reduce carbon emissions and alleviate city road congestion. This model enables the utilization of parked vehicles available in various locations, connecting car owners with co-travellers for city-to-city journeys.
Moreover, car-sharing services have gained traction in both developed and developing urban regions, catering to motorists seeking to share rides during long-distance trips. Europe leads in per capita earnings, while APAC dominates the car-sharing market. Consequently, the increasing adoption of car-sharing services may have an adverse impact on 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 and forecasting strategies.
Market 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.
Autorent Car Rental LLC - The company offers car rental services such as self-driven car rental service.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market 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 market share growth by the offline segment will be significant during the forecast period. With the help of offline booking, customers can reserve a car in advance without having to rely on Internet connectivity. Customers can provide their information to rental companies via phone, email, or in person.
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The offline segment was the largest and was valued at USD 43.93 billion in 2018. The demand for offline booking has grown extensively in recent years owing to the rising preference of customers. In addition, offline booking provides a layer of security to customers. This is particularly important for those who need reliable transportation for business or personal use. Such factors are expected to drive the growth of the offline segment in the market during the forecast period.
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North America is estimated to contribute 41% 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 growth of the market in the region is attributed to factors such as low fuel prices, which have reduced the cost of transport by rental cars. In the US, the market in the US is highly consolidated, as the top players account for a major share of the market. Iet in Canada, the market is driven by the growth of tourism in the country. A crucial factor contributing to the growth of the market in Canada is the increasing demand for car rental services for airport transportation. Therefore, the market is expected to grow in North America during the forecast period.
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.
Electric Car Rental Market: Electric Car Rental Market Analysis Europe, North America, APAC, South America, Middle East and Africa - US, China, Germany, Italy, France - Size and Forecast
Car Rental (Self Drive) Market: Car Rental (Self Drive) Market Analysis North America, Europe, APAC, South America, Middle East and Africa - US, Japan, Germany, France, China - Size and Forecast
Multi Utility Vehicle (MUV) Rental Market: Multi Utility Vehicle (MUV) Rental Market Research by Type, Application, and Geography Forecast and Analysis
The market is booming due to increased business and leisure trips, driven by rising internet penetration and the use of mobile apps. Internet booking applications have revolutionized the car rental experience for global commuters. Brand and distribution platforms now cater to family on corporate trips, enhancing employee retention with convenient international trips. The tourism sector benefits from increased air traffic and adherence to hygiene and safety norms, such as hand sanitizers. Local usage by tourist agencies and cars rental service providers leverages information technology for corporate and customer information management. The Electric Car Rental Market represents a significant and growing segment within the automotive industry.
Further, technologies like near field communications (NFC) enable online booking, verification of documents, drop and pick up, and e signing contracts. With rising smartphone sales, car hire agencies offer both offline access and online access. Segments include leisure/tourism, luxury/premium cars, economy/budget cars, self-driven and chauffeur-driven options, long term mobility solutions, and vehicle rental services. The largest rental car companies focus on enhancing customer experiences, providing flexibility and streamlined booking processes for short term rentals and user-centric mobility options. The Multi-Utility Vehicle (MUV) rental market refers to the business sector where companies provide short-term rentals of MUVs to individuals and organizations.
Market Scope |
|
Report Coverage |
Details |
Page number |
184 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 20.47% |
Market Growth 2024-2028 |
USD 157.34 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
19.61 |
Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
Performing market contribution |
North America at 41% |
Key countries |
US, China, Germany, Italy, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Aspark Holidays Pvt. Ltd., Autorent Car Rental LLC, Avis Budget Group Inc., Carzonrent India Pvt. Ltd., Centauro Rent a Car S.L.U., DriiveMe Ltd., Enterprise Holdings Inc., Europcar Group UK Ltd., Expedia Group Inc., Getaround Inc., GO Rentals Auckland Ltd., Hertz Global Holdings Inc., Localiza Rent a Car SA, Movida Participacoes SA, Renault SAS, SIXT SE, Turismo Gargo SA de CV, Turo Inc., Uber Technologies Inc., and Zoomcar India Pvt. Ltd. |
Market dynamics |
Parent market growth analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the market forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Mode of Booking
7 Market Segmentation by Rental Category
8 Market Segmentation by Type
9 Customer Landscape
10 Geographic Landscape
11 Drivers, Challenges, and Trends
12 Vendor Landscape
13 Vendor Analysis
14 Appendix
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