Car Rental Market

Budget Rental Cars services growth in the travel and tourism industry across the globe

One of the key factors driving the growth of the Rental Car industry is significant growth in the travel and tourism industry around the world. Furthermore, the growing urban population with an increased interest in adventure and travel is fueling Car Rental market growth. In line with this, people are turning to budget Rental Car services such as taxis and carpooling for increased mobility and cost-effective travel. Another growth-inducing factor is the implementation of favorable government policies, as well as increased awareness about environmental conservation. 

Governments in both developed and emerging economies are emphasizing the importance of reducing vehicle emissions and promoting Rental Car management system as one of the most cost-effective modes of transportation. Other factors, such as the introduction of cheap car rental service through websites and mobile apps (smartphone-based applications), coupled with increasing expenditure capacities of the masses, is driving the growth of the Car Rental market revenue.

The Global Car Rental Market Industry is witnessing a paradigm shift towards sustainability, driven by growing environmental awareness among consumers. Rental companies are increasingly adopting eco-friendly practices, such as incorporating electric and hybrid vehicles into their fleets. This shift not only meets the demands of environmentally conscious customers but also aligns with global efforts to reduce carbon emissions. As governments implement stricter regulations on emissions, the rental industry is likely to adapt by prioritizing sustainable options. This trend may enhance the market's appeal, particularly among younger generations who prioritize sustainability in their purchasing decisions. The Global Car Rental Market Industry is thus evolving to meet these new expectations.

The Global Car Rental Market Industry experiences a notable surge in demand for mobility solutions, driven by urbanization and changing consumer preferences. As cities expand and populations grow, individuals increasingly seek flexible transportation options. This trend is particularly evident in metropolitan areas where public transport may not suffice. The market is projected to reach 130.9 USD Billion in 2024, reflecting a growing inclination towards car rental services as a convenient alternative. Additionally, the rise of ride-sharing platforms complements traditional car rentals, further enhancing the appeal of this sector. The Global Car Rental Market Industry is thus positioned to capitalize on these evolving mobility needs.

The Global Car Rental Market Industry is significantly influenced by the expansion of the tourism and travel sector. As international travel resumes and destinations become more accessible, the demand for rental vehicles rises. Tourists often prefer renting cars for convenience and flexibility, allowing them to explore at their own pace. This trend is particularly pronounced in popular tourist destinations where public transport may be limited. The increasing number of travelers is expected to bolster the market, with projections indicating a compound annual growth rate of 7.69% from 2025 to 2035. Consequently, the Global Car Rental Market Industry stands to benefit from this upward trajectory in travel.

Technological innovations play a pivotal role in shaping the Global Car Rental Market Industry. The integration of advanced fleet management systems enhances operational efficiency and customer experience. For instance, real-time tracking and data analytics enable rental companies to optimize vehicle utilization and reduce downtime. Moreover, the adoption of electric vehicles within rental fleets aligns with sustainability goals, appealing to environmentally conscious consumers. As technology continues to evolve, the market is likely to witness increased automation and digitalization, further streamlining processes. This technological shift is expected to contribute to the projected growth of the industry, potentially reaching 295.8 USD Billion by 2035.

The Global Car Rental Market Industry is experiencing a transformation due to the proliferation of digital platforms and online booking systems. Consumers increasingly prefer the convenience of booking rental vehicles through mobile applications and websites. This shift not only simplifies the rental process but also enhances customer engagement and satisfaction. Companies that invest in user-friendly digital interfaces and seamless booking experiences are likely to gain a competitive edge. Furthermore, the integration of customer feedback mechanisms allows rental agencies to refine their services continuously. As digitalization continues to reshape consumer behavior, the Global Car Rental Market Industry is poised for sustained growth.

In terms of revenue, North America held 53% of the market in 2022. The increase in the number of leisure and business tours across North America is driving Car Rental sectorgrowth. Trips to North American cities such as New York, Los Angeles, Chicago, San Francisco, and Las Vegas are also helping the Rental Car business growth.

During the forecast period, Asia-Pacific is expected to grow at an 8.4% CAGR. The rise in consumer spending for tourism and travel, combined with rising disposable income, is driving the growth of the Asia-Pacific car rental market during the forecast period. Market participants include Uber, Avis, Ola, Hertz, Didi Chuxing, Sixt, Zoomcar, Europcar, GrabTaxi, Hailo Line Taxi, and Blue Bird are offering services in the Asia-Pacific region.

Further, the major countries studied are The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2 Car Rental Market Share By Region 2021 (%)

Source Secondary Research, Primary Research, Market Research Future Database and Analyst Review

The Europe Car Rental Market was valued at USD 10.5 billion in 2021, with a CAGR of 13.1% expected to reach USD 20.1 billion by 2030.

France's car rental industry is expected to grow at a significant rate during the forecast period due to the increasing number of tourists in the country. The increasing revenue in France has generally been attributed to a trend in domestic travel spending, which is primarily the result of an increase in foreign tourists.

Germany car rental market is expected to grow at a significant CAGR during the forecast period as Germany is the largest manufacturer of cars in Europe. The Rental Car available in Germany are usually at cheaper rates when compared to other regions in Europe. Hence, the low cost of car rentals in Germany is driving the market growth rate during the forecast period.

The China car rental market dominated the Asia Pacific Car Rental Market by Country in 2020 and is expected to remain dominant until 2030, achieving a market value of $6.93 billion by that time. The Japan market is expected to grow at a CAGR of 3.6% during the forecast period (2021 - 2030). Furthermore, the India market is expected to grow at a CAGR of 4.8% during the forecast period (2021 - 2030).

The market is moderately consolidated, with a large number of international and domestic companies operating globally. However, the industry is on the verge of consolidation, with only a few major companies capturing a significant market share. Enterprise Rent-A-Car, The Hertz Corporation, Sixt SE, Europcar, and Avis Budget Group are among the key participants. These players' primary focus is on improving their services in order to gain a customer base and maximize profitability.

For instance, Sixt SE has released a smartphone app that allows company car drivers to manage their contracts with the touch of a button. From March 2021, Hertz charge an annual membership fee for its 24/7 service, which allows members to rent cars and vans contactless.