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The global commercial vehicle rental and leasing market size was USD 68.27 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with the commercial vehicle rental and leasing industry witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the market exhibited a lower growth in 2020 compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 73.30 billion in 2021 to USD 123.87 billion in 2028 at a CAGR of 7.8% in the 2021-2028 period. The rise in CAGR is attributable to this market's growth returning to pre-pandemic levels once the pandemic is over.
Stringent vehicle emission regulations are boosting the demand for electric vehicle rental leasing services. Thus, key market players are emphasizing on vehicle electrification. For example, Europcar launched the One Fleet program in 2019, which targets to electrify more than one-third of its fleet by 2023. In November 2020, to support the deployment and transition of green vehicles, the company partnered with NewMotion, Europe's leading smart charging provider. This partnership will enable consumers to gain access to Europe's largest public roaming network for charging. Hence, increasing the adoption of electric vehicles and digital services will positively influence the commercial vehicle rental and leasing industry's growth.
Commercial Vehicle Rental and Leasing Market to Show a Momentary Downfall amid COVID-19 Pandemic
The pandemic’s impact on the market is categorized by the fact that travel restrictions have effectively eliminated airline travel in the second quarter of 2020, and the availability of appropriate shelters has led to a decline in the demand for leasing and related services due to the increasing lease cancellations and the reason for forwarding booking has decreased. Due to the rapid decrease in cash flow, the commercial vehicle leasing & rental companies had to speed up their withdrawal plan.
For example, in just one month in March, Avis Budget Group disposed of 35,000 cars and canceled 80% of rental car orders received in the United States for the remainder of the year. However, most fleets enjoy guaranteed depreciation or repurchase plans to reduce losses for market participants. Also, owing to restrictions on additional services, such as public transportation and ride-hailing services, numerous companies are offering free door-to-door car rental services to support consumers. Key players are also essential to adopt targeted methods for specific models and high-yield locations to maximize returns without additional resources. Therefore, these factors will affect the growth rate of the market.
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Trend of Vehicle Electrification is Expected to Positively Influence the Growth of the Market
Owing to the high total cost of ownership and insignificant profitability, the amount of electric vehicles used in commercial vehicle rental and leasing companies is low. The decline in battery prices and the stricter emission targets have led to an upsurge in the demand for electric cars, mostly in the larger companies. Electric vehicles have brought numerous benefits to car rental businesses, such as reducing large fleets' maintenance costs functioned by major market players. Due to city travels’ enhanced sustainability, these vehicles can also bring positive promotion effects for electric cars. Therefore, the rising adoption rate of electric cars can positively impact market growth.
Surging International Tourism is Driving the Growth of the Market
According to data from the United Nations World Tourism Organization (UNWTO), international tourists in all regions were accumulative in 2019. The number of international tourists from emerging regions, such as the Middle East has increased almost twice the global average. Regions, such as Europe and Asia-Pacific also showed positive growth in 2019. According to data from the International Air Transport Association, in 2019, more than 743 million international tourists from the globe visited Europe (accounting for 51% of the global market).
Stable fuel prices and lower fares have led to the strong air travel demand, with incoming passenger traffic increasing by approximately 6%. The growing air connections and purchasing power in emerging regions have stimulated strong demand for air travel by international tourists. Airport rental accounts for most of the revenue generated by major companies in the rental and leasing sector. Hence, the growth of international tourism is driving the development of the market.
Digitization of Rental and Leasing Services Will Drive Growth
Attributable to the expanding inclination towards real-time internet booking among clients, central members in the commercial vehicle rental and leasing sector are quickly acquiring new computerized arrangements with an upgraded client experience. For example, in 2019, SIXT dispatched another coordinated portability stage that joins the SIXT lease, offers, and ride administrations into a single application. With the expanded utilization of digitization stations, the organization can decrease working expenses and give greater adaptability regarding pickup and booking of the leased vehicle. Hence, the increased utilization of online channels will drive the market over the forecast period.
High Operating Costs and Dependence on Airport Rentals is a Key Restraint for this Market
Key players, such as Avis Budget Group, Hertz, and Europcar Mobility Group, are intensely dependent on income created from the air terminal portion. For instance, air terminal incomes represented 64% of the total income created by Avis in 2019. Notwithstanding, an absolute end in air traffic inferable from the pandemic-initiated lockdown prompted a dramatic loss of income as cancellations increased. Besides, the lion's share of the income is usually created during the second and third quarters as the greater part of the occasions are planned at the beginning of spring.
Furthermore, key players operating large vehicle fleets are also susceptible to risks associated with non-program vehicles (around 30% of the vehicle fleet on average) or cars that are not purchased through guaranteed rate of depreciation agreements. Subsequently, these components will limit the development of the market for commercial vehicle rental and leasing during the forecast period.
Business Use Segment to Grow Rapidly in the Upcoming Years
Based on the application type, the market is segmented into business use and personal use. The business use segment holds the largest share globally due to the increasing usage in renting a car for major corporations globally. Moreover, the personal use segment is likely to expect slow growth owing to people’s inclination towards renting rather than owning a car.
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Car Segment to Hold the Major Market Share
The market is segmented into cars, light trucks, and medium & heavy trucks based on the vehicle type. The car segment is projected to account for the major share primarily due to the rising sales and growing demand for renting a personal car in emerging countries. On the other hand, the light trucks segment is also expected to show good growth owing to an increase in e-commerce activities. The medium and heavy trucks segment is expected to register steady growth owing to the rising demand for operations in logistics and transportation.
Asia Pacific Commercial Vehicle Rental and Leasing Market Size, 2020 (USD Billion)
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The market size in the Asia Pacific stood at USD 21.42 billion in 2020. The region holds dominance in the global market owing to digitalization and automation, which are expected to change the way of transportation of people and goods in the upcoming years. These technological advancements are likely to drive the market in Asia-Pacific.
Europe is expected to show significant growth in the market, owing to the existence of major market players in this region. It is projected to drive the development of the market in the region. Companies, such as ALD Automotive, Europcar, and many others have developed several growth opportunities for the market in the region.
North America is estimated to exhibit a steady growth in the global market owing to the rising demand for long-haul operations by fleet management in this region.
The rest of the world market is undergoing significant development in the rental and leasing industry as a number of companies are entering the Middle East & African market. Moreover, the growing import/export trend in the region is expected to further boost the demand for such services.
Enterprise Holdings, Inc. is a Key Player in the Market Stoked by Its Large Fleet Size
The global commercial vehicle rental and leasing market is a fragmented industry with various international and regional players worldwide. Enterprise Holdings, Inc. is the largest company in the market based on revenue and fleet size. The company offers several solutions, such as car rental, truck rental, and fleet management services.
On the other hand, SIXT SE is one of the key emerging players in the field of commercial vehicle rental and leasing owing to its aggressive acquisition and expansion strategy and early adoption of app-based service offerings.
An Infographic Representation of Commercial Vehicle Rental and Leasing Market
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The global commercial vehicle rental and leasing market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, it offers insights into the industry 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.
Value (USD Billion)
By Application Type
By Vehicle Type
Fortune Business Insights says that the global market size was USD 68.27 billion in 2020 and is projected to reach USD 123.87 billion by 2028.
In 2020, the Asia Pacific market value stood at USD 21.42 billion.
The market is projected to grow at a CAGR of 7.8% in the forecast period (2021-2028).
By vehicle type, the cars segment is expected to lead this market during the forecast period.
The expansion of international tourism is the key factor driving the market
Enterprise Holdings, Inc. is the major player in the global market.
Asia Pacific dominated the market in terms of share in 2020.
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