The Global Car Rental Market is estimated to be valued at US$ 119.28 Bn in 2023 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.
Market Overview:
The car rental market provides mobility services to customers through rental of cars and vehicles on an hourly, daily, weekly, or monthly basis. These rental services offer flexibility and convenience to customers over vehicle ownership. Car rentals are majorly used by tourists and business travellers for local and outstation travel needs. The rising tourism industry globally has propelled the demand for car rental services. Additionally, factors such as increasing disposable income, changing lifestyle preferences, and rising road trips and weekend getaways have also augmented the growth of this market.
Market key trends:
One of the key trends witnessed in the global car rental market is the adoption of telematics and smart mobility solutions by rental service providers. Telematics such as GPS tracking enables rental companies to efficiently manage their fleet and provide enhanced customer service. Further, developments in connectivity and automation are also spurring new business models such as peer-to-peer car sharing and mobility-as-a-service platforms. These solutions offer greater flexibility and convenience to choosers. Such technology-driven mobility innovations are expected to revolutionize the car rental industry during the forecast period.
Porter’s Analysis
Threat of new entrants: The car rental market has high barriers for new entrants due to the requirement of large capital to purchase and maintain large fleet sizes.
Bargaining power of buyers: The bargaining power of buyers is moderate since buyers have a variety of options to choose from in terms of brand, vehicle type, and pricing.
Bargaining power of suppliers: The bargaining power of suppliers is low given the fragmented nature of suppliers for cars and other services to car rental companies.
Threat of new substitutes: There is a low threat of substitutes since ride-hailing services only provide an alternative for short-distance travel needs and not for long-distance travel requirements.
Competitive rivalry: The global car rental market witnesses high competitive rivalry among existing industry players.
Key Takeaways
The Global Car Rental Market is expected to witness high growth, exhibiting a CAGR of 11% over the forecast period, driven by increasing international tourism and business travel activities. The market size for 2022 is estimated to be US$ 119.28 billion.
Regional analysis: North America dominates the car rental market currently owing to strong demand from tourism and corporate travel sectors in the US and Canada. Asia Pacific is expected to witness the fastest growth during the forecast period owing to rapid economic development and rising disposable incomes in countries such as China and India leading to increased travel.
Key players: Key players operating in the car rental market include Enterprise Holdings, The Hertz Corporation, Avis Budget Group, Europcar Group. Enterprise Holdings is the largest player in terms of fleet size globally.
Key Takeaways
The Global Car Rental Market size is expected to witness high growth, exhibiting a CAGR of 11% over the forecast period of 2022-2027, driven by increasing international travel for both business and leisure purposes. The market size for 2022 is estimated to be US$ 119.28 billion.
Regional analysis: North America currently dominates the market due to high business and tourism activities in the US and Canada. Asia Pacific is projected to witness the fastest growth during the forecast period owing to rising living standards and disposable incomes facilitating increased travel in China and India.
Key players: Major players operating in the car rental market include Enterprise Holdings, The Hertz Corporation, Avis Budget Group, Europcar Group, Carzonrent, Sixt SE, Al Futtaim Group, Localiza – Rent a Car, Eco Rent a Car, and GlobalCARS. Enterprise Holdings has the largest fleet size worldwide while Hertz, Avis, and Europcar also have significant global presence.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it