Market size
The global car rental market size was estimated to be valued at around US$ 76 billion in 2021. It is expected to reach US$ 96.7 Billion by 2027, with a compound annual growth rate of 3.8% during 2022-2027, with other estimates expecting higher CAGR of 7.46% including commercial vehicle rental and leasing.
In global comparison, most revenue will be generated in the United States projected to reach US$29.20 billion in 2023. Car Rental revenue in the US estimated to reach US$31.80 billion by 2027, at a CAGR of 2.16%, with total number of users of more than 50 Million.
The expected growth is highly correlated to the recovery and growth in global travel in general. According to IATA the expected number of global travelers will reach 4 Billion in 2024 (103% of the 2019 total) with a CAGR of 7% by 2025.
New trends in the industry
Innovation is a critical component that is driving the car hire market. The growing use of data is altering the business and allowing operators to provide better solutions to their consumers. This involves the use of efficient access to customer data management, as well as the creation of user-friendly online reservation apps.
Issues such as the growing popularity of on-demand mobility and the low percentage of automobile ownership amongst millennials are propelling the car rental market forward. Inexpensive automobiles are becoming more popular for airports and interpersonal and inter-transport. The section’s growth is expected to be boosted by a considerable increase in international air passengers in recent years.
Major players operating in the car rental market are investing and expanding their services to fulfill rising demands from consumers. Technological advancement and digitalisation assist market players in staying ahead of the competition. Car rental services are often complemented by websites and mobile apps, allowing online reservations, and car rental offices are primarily located near airports or busy city areas. Alongside the basic rental of a vehicle, car rental agencies typically offer extra services, such as GPS navigation systems, insurance, and entertainment systems.
Effect of global travel on car hire market
Over the last decade, there has been a significant increase in global travel. Global commuters increasingly demand familiar, reliable, and high-quality travel services during their journey. Some of the vital car rental operators are attempting to leverage this trend by expanding their brand and distribution platforms on a global level.
An emerging trend in travel and tourism is the evolution of ‘bleisure.’ This relatively new term describes a combination of leisure travel with a business trip and is gaining popularity across the globe. This incentive is driving people towards the car rental markets.
Airport vehicle rental bookings are vital to the industry and represent a major revenue segment for this market. A giant boom in air tourists around the sector is boosting the section’s sales stream. Leading vehicle rental corporations have counters at airports, wherein customers can hire a car around the clock. The number of aircraft is increasing globally, and air travel costs are dropping proportionally, which is expected to increase the number of air travelers in the coming years. By 2027, there may be 7.2 billion air travelers worldwide, according to the International Air Transport Association (IATA), which will boost the business of car rentals.
Major players operating in the car rental market are investing and expanding their services to fulfill rising demands from consumers. Technological advancement and digitalization assist market players in staying ahead of the competition. Car rental services are often complemented by websites, allowing online reservations, and car rental offices are primarily located near airports or busy city areas. Alongside the basic rental of a vehicle, car rental agencies typically offer extra services, such as GPS navigation systems, insurance, and entertainment systems.
Online bookings – size and emerging trends
Increasing internet availability and usage in emerging and developed markets have further aided car rental companies in capturing a more extensive consumer base through specialized mobile applications for service quality. The low percentage of online access in emerging areas, on the other hand, is impeding industry expansion. Furthermore, vehicle rental software solutions are expected to create attractive development possibilities for rental car industry participants.
Technology is a critical component expected to boost the market over the forecast period. Increased adoption of information technology is transforming the industry and enabling operators to deliver improved services to their customers. This includes utilizing optimized corporate and customer information management and developing convenient internet booking applications.
Newer players, like Zipcar and Share Now, are adopting new and innovative mobility solutions such as car sharing and utilising technologies such as telematics. Uber and Lyft use mobile technologies and devices to better meet consumers’ personal transportation needs. These initiatives are contributing to the disruption of the car rental industry.
Currently, online booking also serves various purposes, such as verification of documents of the renter, offering information to the renter regarding the car, services like drop and pick-up of the rented vehicle at a particular place, e-signing contracts, and cashless transactions. Smartphone sales are another major factor propelling the market. The rising dependence of users on smartphones for carrying out various activities traditionally done by personal computers has significantly helped transform the car rental experience for customers.
Major global and regional players
- Avis Budget Group, is one of largest providers on car rental services in the world with more than 11,000 vehicles in more than 180 countries. The group portfolio includes brands such as Avis, Budget, Zipcar, Payless, and others.
- Enterprise Holdings, was established in the united states in 1957. Today Enterprise Rent a Car operates in more than 8,000 in 90 countries, along with two other well-known brands in the group, National Car Rental and Alamo.
- The Hertz Corporation, was initially founded in Chicago, USA in 1918. Today, Hertz network span across 160 countries worldwide. With multiple mobility and transportation verticals such as Hertz Lease, Firefly, and others, Hertz is considered one the largest mobility providers in the US and across the world. This position was further consolidated by acquiring Dollar Thrifty Automotive Group in 2012.
- Dollar Thrifty Automotive Group is part of the Hertz Corporation and operated in more 77 countries. With key brands such as Dollar and Thrifty, this group is well known positioned in many cities across the world.
- Sixt Rent a Car is the first and oldest known car rental company in the world. Founded in Munich, Germany in 1912, today Sixt provides car hire and other mobility services in more than 105 countries across 2000 locations worldwide.
- Europcar Mobility Group is a French vehicle rental provider, delivering mobility solutions worldwide through an extensive network in more than 140 countries. EMG was recently acquired by Green Mobility Holding.
