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The car rental market size is forecast to increase by USD 157.34 billion at a CAGR of 20.47% between 2023 and 2028. The market is experiencing significant growth, driven by several key factors. The increasing cost of vehicle ownership is pushing consumers towards renting cars instead of owning one. Additionally, the advent of intermediaries and the rise of car-sharing services have made car rentals more accessible and affordable. These trends are transforming the traditional car rental industry, offering new opportunities for market players. The market is expected to grow further, as more consumers opt for flexible and cost-effective transportation solutions such as electric car rental. Car rental companies must adapt to these trends and address challenges such as increasing competition and regulatory issues to remain competitive. Overall, the market is poised for growth, driven by changing consumer preferences and the emergence of new business models.
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Car rental services have witnessed significant growth in recent years, driven by the increasing penetration of the internet and the widespread use of mobile apps. Global travel and international commuters have embraced the convenience of online booking applications, transforming the car rental experience. Car rental operators have leveraged information technology to enhance customer service, with features such as verification of documents, e-signing contracts, and cashless transactions. The integration of telematics in car rental fleets has enabled real-time vehicle tracking and monitoring, improving employee retention and fleet management. The rise of electric vehicles (EVs) in the car rental industry is another trend, as travelers seek sustainable transportation options.
However, travel restrictions and the impact of tourist agencies on demand remain challenges for car rental businesses. Smartphone sales continue to fuel the growth of online booking, making car rental services more accessible than ever before.
The car rental 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 offline segment is estimated to witness significant growth during the forecast period. Offline booking enables customers to reserve a car in advance without having to rely on internet connectivity. This is particularly useful for those who are travelling to remote areas or for those who find themselves in locations where internet connectivity is not reliable. Customers can simply provide their information to the rental company via phone, email, or in person, and the company will take care of the rest. The demand for offline booking has grown considerably in recent years as more customers seek out this added convenience and adopt solutions such as MUV rental. Rental companies are recognizing this trend and are now offering this feature as part of their standard service offering. This has made the process of booking a car much simpler, providing customers with the freedom to rent vehicles at any time, from anywhere.
Additionally, offline booking provides a layer of security for customers. With the ability to book a vehicle even in situations with no internet access, customers are never left stranded without a car. Another reason people choose to book cars offline is to ensure that they get the best rate. People usually think that by booking cars offline, they would be able to negotiate with the staff or get extra discounts. 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 car rental market during the forecast period.
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The offline segment accounted for USD 43.93 billion in 2018 and showed a gradual increase during the forecast period.
North America is estimated to contribute 41% to the growth of the global car rental market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The North American market exhibits a moderate level of consolidation, with major players such as Enterprise Holdings Inc., Avis Budget Group Inc. (Avis), and Hertz Global Holdings Inc. (Hertz) holding significant market share. Smaller companies also operate in the region, albeit generating less revenue than their larger counterparts. The tourism sector, particularly domestic travel, is experiencing a resurgence due to factors like low fuel prices and weakening currencies. This trend is particularly noticeable in countries like Canada, where families are opting for car rentals for holidays instead of international trips. In addition, the increasing popularity of economy cars and SUVs, coupled with the availability of hand sanitizers and other safety measures, is further boosting the market growth. These factors collectively contribute to the expanding demand for car rentals in North America.
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 rise in vehicle ownership cost is the key driver of car rental market growth. Car rental services have gained significant traction in the global travel and commuting landscape, particularly as the internet penetration continues to expand and mobile apps become increasingly popular. The convenience of internet booking applications has revolutionized the car rental experience, offering customers the ability to easily reserve a vehicle for their specific travel needs. As the cost of vehicle ownership continues to rise due to factors such as fuel, registration, taxes, finance, and maintenance, the allure of renting a car for a specific period becomes increasingly appealing. According to recent studies, the average annual cost to own and operate a new car has increased by approximately 14%.
With depreciation accounting for 43% of the ownership cost, the other expenses, including maintenance and fuel, contribute an additional 25%. Amidst the growing challenges of urban congestion and the rising costs of vehicle ownership, car rental services offer a flexible and cost-effective alternative for both business and leisure travelers.
The advent of intermediaries in market is the upcoming trend in the car rental market. Car rental services have undergone significant transformation with the rise of internet penetration and the development of mobile apps. Prior to the digital age, customers had to make phone calls to book cars and negotiate prices. However, the emergence of car rental brokers has revolutionized the industry. These intermediaries act as demand aggregators, enabling customers to compare prices and book cars online. This results in cost savings for customers, while operators face unfavorable sales through intermediaries due to commission payments. With the increasing use of internet booking applications and global travel, car rental experiences have become more accessible and convenient for commuters worldwide.
The rising number of car-sharing services is a key challenge affecting car rental market growth. Car rental services have evolved significantly in recent years with the advent of technology and changing consumer preferences. The increasing penetration of the internet and mobile apps have transformed the car rental industry, making it more accessible and convenient for customers. Car rental experience is no longer limited to traditional booking applications, as car-sharing models have emerged, allowing users to rent cars on an hourly or daily basis from freely parked vehicles in urban areas or business districts. This trend is popular among both developed and developing economies, with car-sharing services connecting car owners and commuters for city-to-city journeys through large carpooling platforms.
The car rental 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 car rental market growth analysis 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.
Aspark Holidays Pvt. Ltd. - The company offers car rental services such as self driven car rental service, which needs to be pre-booked one day before the trip.
The car rental market research and growth report 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.
Car rental services have witnessed significant growth in recent years, driven by the increasing penetration of the internet and the rise of mobile apps. Global travel and international trips have fueled the demand for car rental services among both leisure and business travelers. Car rental operators have responded by offering customer-centric solutions, including online booking applications and convenience features such as employee retention, hand sanitizers, and vehicle rental services for airport transport and local usage. The tourism sector, particularly international trips, has been a major contributor to the market. The air traffic industry's recovery from the pandemic has further boosted demand.
In response, car rental operators have expanded their offerings to include electric vehicles (EVs) and mobility solutions. Technology plays a crucial role in the car rental industry, with information technology and telematics enabling streamlined booking processes, online platforms, and e-signing contracts. Cashless transactions and offline access are also becoming increasingly important for customer convenience. The market also caters to various segments, including economy cars, SUVs, luxury/premium cars, self-driven, and chauffeur-driven options, offering flexibility for different customer needs. Short-term rentals remain popular, but long-term rentals are also gaining traction. Customer experiences are a key focus for car rental operators, with convenience, flexibility, and streamlined booking processes being essential factors. The market is expected to continue growing, driven by the increasing popularity of online booking and the continued recovery of the global travel industry.
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 analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our car rental market forecast report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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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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