Car Rental Market to See Huge Growth & Profitable Business
The surging need for convenient mobility is resulting in the wide-scale adoption of car rental services. Renting a car enables people to enjoy the facilities of owning a personal vehicle, without needing to purchase it. By renting a car, individuals don't have to worry about the damages caused to the vehicles while cruising through dense traffic and on uneven roads. Moreover, owning a personal car requires huge investments, which include vehicle cost, insurance cost, maintenance charges, fuel costs, and parking expenses.
Moreover, the increasing digitization in rental services will fuel the car rental market at a CAGR of 7.9% during 2019–2024. The market was valued at $78.7 billion in 2018 and it is expected to reach $122.6 billion revenue by 2024. The introduction of mobile applications and websites of car rental service providers has enabled users to easily rent a car by booking on these platforms. The mobile applications of such companies provide every detail and assistance offered by them. These platforms also offer information about the customized rental services provided by car rental companies.
In recent years, increasing environmental concerns have led to the large-scale adoption of Electric Vehicles (EVs) by rental service providing companies. Governments of several countries are implementing regulations and policies to encourage the induction of EVs in the fleets of car rental companies. Additionally, these companies are also taking numerous initiatives to incorporate electric vehicles in their fleets. For example, Sixt SE offers electric cars, such as BMW i3, BMW i8, Tesla Model S, and Tesla Model X, for renting purposes.
In recent years, car rental service providing companies have been focusing on introducing new services to lure more customers. For example, in April 2019, Enterprise Holdings Inc. launched its car subscription service, which allows customers to pay monthly fees to choose from six types of vehicles– small and medium-sized trucks, small and mid-sized Sports Utility Vehicles (SUVs), and full-size and premium sedans. Additionally, the service providers are also opting for partnerships to expand their presence among customers.
Nowadays, car rental services provided by Enterprise Holdings Inc., Sixt SE, Hertz Global Holdings Inc., Localiza Rent a Car SA, Zoomcar India Pvt. Ltd., Europcar Mobility Group S.A., Addison Lee Ltd., Avis Budget Group, Uber Technologies Inc., Beijing Xiaoju Technology Co. Ltd. (Didi Chuxing), ECOS India Mobility & Hospitality Pvt. Ltd., Carzonrent India Pvt. Ltd., and ANI Technologies Pvt. Ltd. are being primarily used for personal use. People nowadays are opting for a rented car over personal cars to travel within and across cities.
According to P&S Intelligence, North America dominated the car rental market in the past and it is expected to maintain the lead in the forthcoming years as well. This can be credited to the deep penetration of such services in the U.S. and the introduction of various initiatives by the companies in the region to optimize their services. For instance, Uber Technologies Inc. has deployed mobile technologies and other smart devices to effectively meet the personal transportation needs of customers.
Thus, the huge expenses associated with vehicle ownership and the rapid digitization of operations by car rental service providing companies are encouraging individuals and businesses to opt for car rental services.
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