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The global commercial vehicle rental and leasing market size was USD 86.33 billion in 2019 and is projected to reach USD 116.72 billion by 2027, exhibiting a CAGR of 8.0% during the forecast period.
Leasing is similar to renting but the time duration for leasing is longer as compared to renting. Rapid growth in smartphone users globally and increasing reliance on technology for performing activities such as paying and booking for rental services can create immense growth opportunities. Various vehicle rental and leasing companies are developing apps to notify their customers through mobile applications about discount coupons, promotional offers, real-time tracking, fare, and availability of the vehicle. The key players are focused on streamlining business processes to better serve the demand for cars. Leasing a vehicle or truck minimizes the operational cost. Numerous truck operators have a preference for leasing or renting trucks rather than purchasing them. Furthermore, renting a truck with full-service eliminates the financial responsibility of servicing, maintenance, and vehicle replacement. Thus, these factors are anticipated to boost the growth of the market during the forecast period.
The outburst of the Coronavirus (COVID-19), which started in Wuhan, China at the end of December 2019, is spreading fast across the globe and it is having a most important impact on all aspects of civilization. At the start, vehicle manufacturers and their providers have been scrambling to keep vehicle assembly lines active but March has seen the production take action, in sync with administration advisories, to keep its workers safe. The World Health Organization declared the COVID-19 outbreak and a pandemic. Automobile, construction, and tourism industries are being shut down around the world, customer footfalls in showrooms have fallen harshly. Tourism revenue has dropped considerably and almost every major industry conference is either being canceled or held virtually. The entire March has been packed with COVID-19 outbreak a pandemic. The impact of COVID-19 and the lockdown has vigorously impacted the financial market as well. These factors are estimated to hamper the growth of the market.
As there is an outburst of the Coronavirus (COVID-19), the countries which are being affected have started the lockdown for social distancing, thus, various industries, hotel, and commercial sectors are locked down for further few months. These factors are anticipated to hamper the growth of the market during the forecast period for the next few years. According to the Centers for Disease Control and Prevention (CDC), the logistics and transportation industry may be particularly affected by the Coronavirus (COVID-19). If disruptions in the supply chain occur, the companies will work to identify alternate transportation modes and routes. After the Covid-19 global pandemic, commercial vehicle rental and leasing providers are anticipated to look for a fast track strategy for growth in rental and leasing of vehicles and supply chains as they prepare for a volatile demand environment.
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Shift Towards Use of Rental Vehicles for Long Journey
The automotive industry is moving towards developing and designing innovative technologies to permit advanced vehicle safety, better connectivity solutions, and improve in-vehicle user-experience for rental vehicles as well as for personal use. The key players are focusing on developing more features into their commercial vehicle for achieving growth in the rental and leasing market, to make as enjoyable and as effortless journeys as possible. Whether it's a long drive, family vacation, or ride to a national park, there is an increasing demand for renting vehicles or leasing the vehicles as per the duration of the journey. The various modern commercial vehicles connect with all the smart automotive technologies such as ADAS systems, 2X connectivity solutions, telematics devices, smartphones, sensors, and others. These factors are anticipated to propel the growth of the market during the forecast period at a significant CAGR.
Various Features Offered by Rental Vehicles is Expected to Boost the Growth of Market
With the growing demand for lavish, safe, and smart vehicles, automobile manufacturers are developing automobiles with advanced technology. The rental vehicle providers offer a mixture of entertainment and information for an improved in-vehicle experience. The manufacturers of technologically advanced vehicles are providing features such as parking recommendations, pre-trip planning, predictive navigation, and other important features. Smartphones can be paired with commercial vehicles using Bluetooth connectivity or WiFi hotspot. Pairing the smartphone with the vehicle allows the user to access features on the phone. As there are various features offered by the vehicles, there is rapid growth in renting features loaded commercial vehicles for the long journey. Thus, these factors are anticipated to boost the growth of the market during the forecast period at significant CAGR
Rapid Growth in Tourism and Transport is Gaining the Traction
Rapid growth in tourism and transport is significantly propelling the growth of the market during the forecast period at a significant CAGR. Various key players of the commercial vehicle renting and leasing market are working to enhance the visitor experience, including suitable multi-modal transport options to access destinations, well-organized connections between local and inter-regional modes, baggage transfer and storage options, multilingual user information and way-finding, and ease of access for travelers with limited mobility. These factors are propelling the growth of the market over the forecast period at High CAGR.
High Cost Associated with Rental Services of Commercial Vehicles is Anticipated to Hamper the Growth of Market
Nowadays, vehicles are equipped with interactive information and entertainment systems for entertainment and guidance purposes. As the rental vehicle providers provide a mixture of entertainment and information for an improved in-vehicle experience, there is a high cost associated with the market. The average lease prices can range from $300 a month for smaller trucks and small cars and can extend over $1,000 a month per vehicle for large, luxury, or semi-trucks. These factors are hampering the growth of the market during the forecast period.
Business Use Segment of Commercial vehicle rental and leasing is Expected to Hold the Large Market Share
Based on the rent type, the market is segmented into business use and personal use of commercial vehicle rental and leasing. The business use segment of the commercial vehicle rental and leasing segment is expected to exhibit significant growth in this market owing to the rapid adoption of commercial vehicles for various industries, resorts, multinational companies in various regions. The personal use segment of the commercial vehicle rental and leasing segment is also expected to show good growth in this market as there is an increase in tourism and traveling with luxury vehicles for a comfortable and enjoyable ride. These factors are propelling the growth of the market.
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Light Trucks Segment is gaining the traction and Expected to Hold the Largest Market Share
Based on the vehicle type, the market is segmented into cars, light trucks, heavy/medium trucks. The car segment holds the largest market share for this technology, owing to the higher production of passenger cars globally as well as rapid adoption by consumers. The light trucks segment is also expected to contribute to the growth of commercial vehicle rental and leasing for various mid-sized industries. The heavy/medium trucks segment is expected to show steady growth in this market as there is an increasing need for various manufacturing and construction industries. These factors are influencing the commercial vehicle rental and leasing market growth.
North America Commercial vehicle rental and leasing Market Size, 2019 (USD Billion)
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By geography, the market has been segmented into North America, Asia Pacific, Europe, and Rest of the World. Currently, the market exhibits a strong growth rate in developed economies. The countries in North America such as the US are expected to dominate the global commercial vehicle rental and leasing industry as there is rapid growth in the technology for vehicle user experience. The market share of North America is followed by European countries such as Spain, Germany, France, UK, and Italy. As there is rapid growth in the tourism sector in European countries. The growth potential in emerging markets such as China, India, and Brazil is likely to account for the largest share owing to the rising population in those regions. These factors are anticipated to boost the growth of the market during the forecast period at a significant CAGR.
PACCAR Leasing Company, Penske Automotive Group, Inc., and Enterprise Holdings Inc.are Top Market Players
PACCAR Leasing Company, Penske Automotive Group, Inc., and Enterprise Holdings Inc. are top market players in the world. These players are focusing on providing wide-ranging and advanced commercial vehicle rental and leasing for various vehicle manufacturers in vkey regions across the globe.
However, RYDER, The Hertz Corporation, Avis Budget Group, ALD Automotive, SIXT SE, Europcar, Localiza, Unidas, and Movida, are also prominent players in this market.
An Infographic Representation of Commercial Vehicle Rental and Leasing Market
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Value (USD billion)
By Rent Type
By Vehicle Type
Fortune Business Insights says that the global market size was USD 86.33 billion in 2019 and is projected to reach USD 116.72 billion by 2027.
In 2019, the market value stood at USD 86.33 billion.
The market is projected to grow at a CAGR of 8.0% and will exhibit steady growth in the forecast period (2020-2027).
The business use segment in the market is expected to be the leading segment during the forecast period.
Rapid growth in tourism and transport is gaining the traction of market
PACCAR Leasing Company, Penske Automotive Group, Inc., and Enterprise Holdings Inc. are top market players
North America dominated the market share in 2019.
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