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The global commercial vehicle rental and leasing market size was valued at USD 77.42 billion in 2021. The market is projected to grow from USD 82.69 billion in 2022 to USD 131.46 billion by 2029, exhibiting a CAGR of 6.8% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with commercial vehicle rental and leasing experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a lower growth in 2020 as compared to 2019.
Stringent vehicle emission regulations boost 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 electrifying 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 New Motion, 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 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 rental & leasing 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 of the market
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Trend of Vehicle Electrification is Expected to Positively Influence 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 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 the market growth.
Low Penetration Level in Certain Emerging Economies to Drive Growth of the Market
The median commercial fleet capacity in India is around 100 units and has been stable over the last few years. However, the rise of leasing can break this cycle and result in bigger enterprise fleets. According to Karmakar, the present corporate leasing utilization in India is around 4%. With such a low penetration rate, there is a huge chance to expand the leasing business in India. Below is the penetration rate of commercial fleets in India.
Growing urbanization, rising and improvement in road connectivity, amongst others, is a key catalyst to driving improvement in penetration levels for commercial vehicles. As a result, the entire values chain in commercial vehicles, starting from original equipment manufacturers (OEMs), such as Tata, Daimler, Paccar, and MAN trucks, to the renting and leasing players, such as Europcar, ALD Automotive, and Paccar Leasing, are likely to witness steady growth during the forecast period. Additionally, rural India has been one of the main sources of consumer demand in India, mainly due to the large population residing in this area.
In the commercial vehicle segment, mini truck sales are predominantly dependent on rural India. People living in rural areas prefer pickup trucks to mini trucks, given their sturdy structure, superior performance, and lower costs, especially in the pickup segments. Further, OEMs have been offering heavy discounts on commercial vehicles due to increased demand to gain market share. These factors, in turn, will drive the growth of the market.
Digitization of Rental and Leasing Services Will Drive the Market Growth
Attributable to the expanding inclination toward 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.
Cost and Operational Difficulties Can Hamper Growth of the Market
The availability of trucks is one of the issues haunting the truck rental business. Consumers have to book the trucks or mini trucks in advance, unlike car rentals.
If the driver has to return the truck to a different area due to a long-distance trip, the truck rental firm may charge the driver a higher premium.
If the customer's rented moving truck does not have adequate space for the objects to be moved, the client may have to make more trips than expected and pay more. In this instance, the customer should rent a truck at least 15% larger than the real size. Having extra space on the truck will allow them to properly load their things to remain safe while in transit.
Many truckers face the issue of truck damage compensation in spite of not doing any harm to the trucks as they didn’t inspect the truck before taking over from the company. When a trucker owns a truck, he is aware of the exact condition of the truck; however, in the case of rented trucks, many times, the company charges high for the damages that were done by the previous trucker as the current trucker didn’t inspect the truck before taking it over.
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Enterprise Leasing Segment to Grow Rapidly in the Coming Years
Based on application type, the market is segmented into enterprise leasing and personal leasing. The enterprise leasing segment holds the largest share globally due to increasing usage of renting a car for major corporations globally. Moreover, the personal leasing segment is likely to expect slow growth owing to people’s inclination toward renting rather than owning a car.
Car Segment to Hold Major Market Share due to Rising Sales
The market is segmented into car, light truck, and medium/heavy trucks based on 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.
North America Commercial Vehicle Rental and Leasing Market Size, 2021 (USD billion)
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The market size in North America stood at USD 27.64 billion in 2021. The region holds dominance in the global market owing to digitalization and automation, which are expected to change the transportation of people and goods in the coming years. These technological advancements are likely to drive the market in North America.
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.
Asia Pacific holds the second largest market share in the global commercial vehicle rental and leasing market. The region is estimated to exhibit a steady growth in the global market owing to rising demand for long-haul operations by fleet management in this region. Furthermore, low penetration level in India and China will help to grow the market at a CAGR of 7.57%.
The rest of the world 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 due 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 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 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 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 in recent years.
Value (USD Billion)
By Vehicle Type
Fortune Business Insights says that the global commercial vehicle rental and leasing market size was USD 77.42 billion in 2021 and is projected to reach USD 131.46 billion by 2029.
In 2021, the North America commercial vehicle rental and leasing market value stood at USD 27.64 billion.
The commercial vehicle rental and leasing market is projected to grow at a CAGR of 6.8% over the forecast period (2022-2029).
By vehicle type, the car 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.
North America dominated the market in 2021.
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