"Market Intelligence for High-Geared Performance"

Car Rental Market Size, Share & COVID-19 Impact Analysis, By Vehicle Type (Luxury Cars, Executive Cars, Economy Cars, SUVs, and MUVs), By Application Type (Local Usage, Airport Transport, Outstation and Others), By Rental Duration Type (Short-Term, Long-Term), and Regional Forecast, 2020-2027

Region : Global | Format: PDF | Report ID: FBI105117

 

KEY MARKET INSIGHTS

Play Audio Listen to Audio Version

The global car rental market size was USD 85.79 billion in 2019. The global impact of COVID-19 has been unprecedented and staggering, with rental cars experiencing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of -32.0% in 2020 as compared to the average year-on-year growth during 2016-2019. The market is projected to grow from USD 58.34 billion in 2020 to USD 144.21 billion in 2027 at a CAGR of 6.7% in the 2020-2027 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.


The car rental industry has gained considerable attention in the last decade owing to the increasing penetration of smartphone-based online rental car booking applications. Companies offer cars on a short-term or long-term rental basis to the customers. The majority of these services are made available in tourist places and tier 1 & 2 cities. Key factors responsible for the substantial growth in this industry include increasing pollution & car prices, and cost-effectiveness. The market is emerging as the key vertical in the transportation industry, considerably benefitting not only consumers and rental companies but also car manufacturers. The car manufacturers have come up with lucrative schemes, such as car leasing, which are availed by small companies to increase their fleet size without hampering their budget.


COVID-19 Impact: Substantial Decline in Global Tourism Industry Owing to Nationwide Lockdown May hamper Growth


The COVID-19 pandemic has resulted in nationwide lockdown in most of the major economies including China, Japan, the UK, Germany, and a few parts of the U.S. International traveling was banned for a prolonged period of almost 7 to 8 months, which had a significant impact on the global tourism industry. This, in turn, has severely affected the rental business. The pandemic had a severe impact on the top global rental companies resulting in loss of market share, decrease in rankings, market volatility, and downgrades. In addition, In May 2020, the global car rental leader Hertz filed bankruptcy after the demand for rental cars vanished due to the lockdown. The company had to lay-off its major share of employees and dispose of its non-relevant assets.


Moreover, the lockdown has resulted in a significant drop in air traffic as both domestic as well as international traveling was restricted during the pandemic. Airlines were offering only 51% seats to maintain social distancing causing a total passenger reduction of around 2.89 billion and approximately USD 391 billion loss in airline revenue. This steep fall in travellers hugely impacted the airport taxi business, showcasing a drop of over 30% during the pandemic.


The rental revenues of almost all major companies were hampered significantly. For instance, Avis Budget Group experienced a market revenue decline of 42% compared to 2019, Europe car had a 42% drop whereas Hertz rental showcased a 56% fall in revenue and filed bankruptcy in Q3 2020.


LATEST TRENDS


Request a Free sample to learn more about this report.


Increasing Smartphone Penetration in Developing Countries to Favor Car Rental Market Growth


The decreasing smartphone prices have boosted the adoption of smartphones, especially in developing countries including India, China, Brazil, and Indonesia. For instance, it is estimated that the number of smartphone users will rise to around 970 Million by 2025. Companies around the world are eying on this opportunity by offering smartphone-based online car booking applications. Various third-party companies are also acting as a facilitator by offering their booking platform and consolidating all major rental companies on a single platform.


These online platforms have eased the overall car renting process as the user needs to verify his/her document only once. In addition, features including online transactions and easily located dropping points are also provided. The applications also help the renters in fleet management, disaster management, emergency services, receiving online payments, and monitoring vehicle health & location remotely. All such lucrative features offered by the online platforms make them a preferred mode for renting a car.


DRIVING FACTORS


Rising Number of Air Travelers to Propel Market Growth


As per Boeing CEO Dennis Muilenburg, less than 20% of the global population has never set foot on an airplane, one of the key reasons for such a low count is high travel fare compared to the normal transportation mediums. However, as the number of aircraft is growing worldwide, the air travel fare is decreasing relatively, which in turn is estimated to boost the number of air travellers in the upcoming years. As per International Air Transport Association (IATA), the global air travellers’ count may reach 7.2 Billion by 2027. As airport taxi comprises a major share of the global market, the growth in air traffic shall directly benefit the market.


Increasing Demand from Corporate Travelers to Boost the Market Growth


As businesses are expanding globally, the number of business travellers is growing substantially since the last decade. The increasing population of corporate travellers has strengthened the demand for premium executive cars in the rental industry. Executive cars offer ease of travel and comfort on a cost-effective budget, therefore the demand for such cars is growing worldwide. Many companies are focusing only on the corporate segment, considering the lucrative business opportunities and growth potential offered by this market. The demand for ride share is expected to further boost the market demand for car rental businesses.


RESTRAINING FACTORS


Surging Crude Oil Prices to Restrain Market Growth


The automotive & transportation industry has a direct impact on the fluctuation in crude oil prices. High gasoline and diesel prices in several developing countries act as a key restraining factor for offering a car on rent as the rental prices cannot be changed frequently depending on the crude oil prices and eventually the rental companies face fluctuation in the profits. For instance, the per-barrel price for crude oil was USD 17 in 2000, which was increased to USD 45 in 2020 due to increasing demand globally. Moreover, government taxes lift the gasoline and diesel prices, considerably affecting the global industry.


SEGMENTATION


By Vehicle Type Analysis


To know how our report can help streamline your business, Speak to Analyst


Economy Cars Segment to Dominate the Market


Based on the vehicle type, the market is segmented into Luxury cars, Executive cars, and Economy cars, Sports Utility Vehicles (SUVs), and Multi Utility Vehicles (MUVs).


The economy cars segment dominated the global car rental market, with a 37.18% market share in 2019. Economy cars are compact, fuel-efficient, and offer enough comfort, therefore are preferred by a majority of the users. From the rental companies’ perspective, the economy cars have low procurement and maintenance costs compared to the luxury and executive cars segment, therefore the majority of their fleet comprises cars from the economical car range. The majority of the airport taxi and intra-city taxis fall under this category.


Executive cars offer optimum features and comfort at low cost, therefore the executive segment is expected to be the fastest-growing segment during the forecast period. As the economies of developing countries including India, China, and Brazil are growing stronger, the number of businesses in these countries is flourishing. In order to provide better transportation services to employees, the demand for executive cars is growing steadily worldwide.


The demand for luxury cars is flourishing in India and China as the portion of high-income groups is increasing in these countries. The developed countries have a moderate demand for these cars owing to market saturation. The demand for SUVs and MUVs is growing at a moderate growth rate as these vehicle types offer large passenger capacity, premium features, and comfort. Especially, SUVs are gaining attention for long-term rental owing to their moderate rental rates and easy availability. These vehicle types are also preferred for leisure and recreational activities.


By Application Type Analysis


Interior type Segment is Expected to Hold the Largest Car Rental Market Share


Based on the application, the market is segmented into Local Usage, Airport Transport, Outstation, and Others.


The airport transport segment is anticipated to grow exponentially at a CAGR of 6.5% between 2020 and 2027. The key factors attributable to such high growth are increasing air traffic and the number of airports in developing countries worldwide. The decreasing air travel fares are attracting numerous people to shift to air travel from traditional travel modes, owing to which, domestic air traffic showcased a surge of almost 35% in the last decade. Therefore, the demand for airport rental taxis is anticipated to showcase a high surge in the next few years.


The demand for local transport taxis is growing steadily at a moderate pace. The increasing usage of shared cabs is slightly affecting the demand for rental cars in local transport. In addition, lowering fares of public transports, such as bus, train, and metro, are expected to further impact the local transport segment growth. The outstation segment is witnessing a lower growth rate since January 2020, as the COVID19 pandemic had negatively impacted the tourism industry, which in turn vanished the demand for outstation rental cars.


By Rental Duration Analysis


Short Duration Rental Segment to Remain Dominant


Based on the rental duration, the market is segmented into short-term and long-term segments.


The short-term segment dominated the market in 2019 and is anticipated to continue its domination over the forecast period as well. Short-term rental cars are used for applications, such as local transportation and airport transportation, therefore the segment accounts for the larger market share in the global market. The long-term segment is expected to grow at the fastest CAGR between 2020 and 2027, as the demand for rental cars is growing exponentially for outstation traveling as well as corporate leasing.


REGIONAL INSIGHTS


North America Car Rental Market Size, 2019 (USD Billion)

To get more information on the regional analysis of this market, Request a Free sample


Middle East & Africa to Emerge as Fastest Growing Region


Based on region the market is segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.


North America is estimated to dominate the global market with over 37% market share in 2019. The growth can be attributed to the increasing demand for rental cars for leisure activities and business trips in the region. Moreover, the increasing tourism in North America and Europe is also driving demand for car rental services in these regions.


The scenario in Asia Pacific and Latin America is very different from that of North America. In these regions, the demand is driven by increasing vehicle prices as well as fuel costs. As the majority of the regional population falls under middle-class disposable income groups, rental cars are a preferred choice to fulfill the travel demands. The Middle East & Africa is anticipated to grow at the fastest CAGR over the forecast period, primarily due to the increasing businesses and tourism in the region.


KEY INDUSTRY PLAYERS


Enterprise Holdings, Inc. is a Key Player in the Market


Enterprise Holdings, Inc. is a company based in Missouri, the U.S. The company holds the world's largest fleet of over 1.7 million rental cars and serves over 8,000 locations in North America, Europe, and Latin America. The company operates three brands under its roof, National, Enterprise Rent-A-Car, and Alamo. The National brand focuses on premium customers and business travellers, the Enterprise Rent-A-Car brand focuses on affordable intercity travellers, and the Alamo brand focuses on low-budget travellers, offering affordable rental services. The company has a separate division that focuses on selling slightly used rental cars to customers.


Hertz Rental, the leading player among the car rental companies faced critical challenges and filed bankruptcy during the COVID-19 pandemic. Although the company has a wide distribution network, especially in the U.S., it failed to manage funds well during the lockdown. The company has recently sought financing of $1.65 billion to cope up with the tough times.


LIST OF KEY COMPANIES PROFILED:



  • Enterprise Holdings Inc. (Missouri, U.S.)

  • Hertz Global Holdings (Florida, U.S.)

  • Avis Budget Group (New Jersey, U.S.)

  • Europcar Mobility Group (Paris, France)

  • Lotte rental co.ltd (Gyeonggi Province, South Korea)

  • TOYOTA Rent a Car (Aichi, Japan)

  • Europcar International (Paris, France)

  • Sixt SE (Pullach, Germany)

  • Localiza Rent a Car SA (State of Minas Gerais, Brazil)

  • CAR Inc (Beijing, China)

  • Renault Eurodrive (Boulogne-Billancourt, France)

  • Alamo Rent A Car LLC (Missouri, U.S.)


KEY INDUSTRY DEVELOPMENTS:



  • In April 2021, GoAir partnered with Eco Europcar and launched car rental services across 100 cities in India, including 25 airports. Through Eco Europcar, GoAir will be offering Chauffeur-driven cars from mid to luxury car segments.

  • In February 2021, Humax announced that it will supply the WTC Auto Rent RAiDEA mobility service platform to customers in the Middle East by improving technology for a round trip, free-floating, and one-way infrastructures specially designed for cars, including electric scooters, bikes, motorcycles, and cars.

  • In February 2021, Theeb Rent a Car, a Saudi-based car rental firm has expanded its car rental fleet in the Kingdom. The company's expansion strategy is to modernize and develop its fleet to offer different car brands and models to its customers.


REPORT COVERAGE


An Infographic Representation of Car Rental Market

To get information on various segments, share your queries with us



The market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, vehicle types, and leading applications of the services. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.


Report Scope & Segmentation











































  ATTRIBUTE



  DETAILS



Study Period



  2016-2027



Base Year



  2019



Forecast Period



  2020-2027



Historical Period



  2016-2018



Unit



  Value (USD Billion)



Segmentation



By Vehicle Type



  • Luxury cars

  • Executive cars

  • Economy cars

  • Sports Utility Vehicle (SUVs)

  • Multi Utility Vehicle (MUVs)



By Application Type



  • Local usage

  • Airport transport

  • Outstation

  • Others



By Rental Duration Type



  • Short-term

  • Long-term



By Geography



  • North America (U.S., Canada, And Mexico)

  • Europe (U.K., Germany, France And Rest Of Europe)

  • Asia-Pacific (Japan, China, India, South Korea and Rest of Asia- Pacific)

  • Latin America (Brazil, Mexico)

  • Middle East & Africa



Frequently Asked Questions

Fortune Business Insights says that the global market size was USD 85.79 billion in 2019 and is projected to reach USD 144.21 billion by 2027.

In 2019, the market in North America stood at USD 31.73 billion in 2019.

The market is projected to grow at a CAGR of 6.7% and is expected to witness exponential growth in the forecast period (2020-2027).

The Executive car segment is expected to be the leading segment in this market during the forecast period.

Increasing smartphone penetration in developing countries are driving the global market

Enterprise Holding Inc. is the leading player in the global market.

North America dominated the market share in 2019.

The growing number of air travelers to propel the adoption of these services across the world.

Seeking Comprehensive Intelligence on Different Markets?
Get in Touch with Our Experts

Speak to an Expert
Car Rental Market Size, Share and Global Industry Trend Forecast till 2026
  • Apr, 2021
  • 2019
  • 2016-2018
  • 200

    CHOOSE LICENSE TYPE

  • 4850
    6850
    8850

Personalize this Research

  • Granular Research on Specified Regions or Segments
  • Companies Profiled based on User Requirement
  • Broader Insights Pertaining to a Specific Segment or Region
  • Breaking Down Competitive Landscape as per Your Requirement
  • Other Specific Requirement on Customization
Request Customization Banner

Automotive & Transportation Clients

Asahi
GM
Hyundai
KIA
Bosch

Client Testimonials

“We are happy with the professionalism of your in-house research team as well as the quality of your research reports. Looking forward to work together on similar projects”

- One of the Leading Food Companies in Germany

“We appreciate the teamwork and efficiency for such an exhaustive and comprehensive report. The data offered to us was exactly what we were looking for. Thank you!”

- Intuitive Surgical

“I recommend Fortune Business Insights for their honesty and flexibility. Not only that they were very responsive and dealt with all my questions very quickly but they also responded honestly and flexibly to the detailed requests from us in preparing the research report. We value them as a research company worthy of building long-term relationships.”

- Major Food Company in Japan

“Well done Fortune Business Insights! The report covered all the points and was very detailed. Looking forward to work together in the future”

- Ziering Medical

“It has been a delightful experience working with you guys. Thank you Fortune Business Insights for your efforts and prompt response”

- Major Manufacturer of Precision Machine Parts in India

“I had a great experience working with Fortune Business Insights. The report was very accurate and as per my requirements. Very satisfied with the overall report as it has helped me to build strategies for my business”

- Hewlett-Packard

“This is regarding the recent report I bought from Fortune Business insights. Remarkable job and great efforts by your research team. I would also like to thank the back end team for offering a continuous support and stitching together a report that is so comprehensive and exhaustive”

- Global Management Consulting Firm

“Please pass on our sincere thanks to the whole team at Fortune Business Insights. This is a very good piece of work and will be very helpful to us going forward. We know where we will be getting business intelligence from in the future.”

- UK-based Start-up in the Medical Devices Sector

“Thank you for sending the market report and data. It looks quite comprehensive and the data is exactly what I was looking for. I appreciate the timeliness and responsiveness of you and your team.”

- One of the Largest Companies in the Defence Industry
We use cookies to enhance your experience. By continuing to visit this site you agree to our use of cookies . Privacy.
X