The Growing Car Rental Market is Estimated to Witness High Growth Owing to Rising Demand for Hassle-Free Mobility Services
The car rental market involves rental of motor vehicles like passenger cars, trucks, vans, utility Trailers and recreational vehicles to customers for short periods. Customers can opt for car rentals for both leisure and business purposes. Major use cases include car rentals for tourism activities, business trips, events and conferences to avoid the hassles of owning a private vehicle.
The global car rental market is estimated to be valued at US$ 153.49 Mn in 2023 and is expected to exhibit a CAGR of 2.9% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
One of the key drivers for the growth of the car rental market is the rising demand for hassle-free mobility services. With hectic lifestyles and work schedules, customers prefer opting for rental cars during travels to avoid responsibilities of vehicle ownership such as insurance costs, maintenance and repair expenses. This makes car rentals a cost-effective option. Further, the growing tourism and travel industry is also fueling the demand for rental vehicles from customers visiting leisure destinations. Rental cars offer flexibility to tourists and travelers exploring various places. Do not write anything about key players.
SWOT Analysis
Strength: The car rental market share offers flexibility and convenience to customers. It allows travelers to rent a car for a short period of time without long-term commitments. Many rental companies have large fleets of vehicles in airport and city locations making cars easily accessible. They provide insurance and roadside assistance coverage reducing customers' risks.
Weakness: Frequent fluctuations in fuel prices and interest rates can negatively impact operating costs for rental companies. Used vehicles also depreciate rapidly reducing their resale value. Seasonal changes in demand across locations is a challenge for optimal fleet utilization.
Opportunity: Growing tourism and business travel globally is increasing the demand for rental cars. Customers prefer rental over owning a vehicle for short trips. The market is shifting towards online bookings and contactless services owing to technology advances. Alternate fuel vehicles can provide new opportunities with changing sustainability preferences.
Threats: Spread of infectious diseases can disrupt travel and lower rental volume temporarily. Stricter emission regulations pose retrofitting costs for fleets. Mobility as a service options through ride-hailing and shared transportation threaten traditional rental models.
Key Takeaways
The global car rental market is expected to witness high growth over the forecast period driven by increasing international tourism and business travel. The global car rental market is estimated to be valued at US$ 153.49 Mn in 2023 and is expected to exhibit a CAGR of 2.9% over the forecast period 2024 to 2031.
Regional analysis: The Asia Pacific region has emerged as the largest and fastest growing regional market for car rentals accounting for over 35% of the global revenue in 2024. Countries such as China, India, and Japan have experienced substantial growth in domestic and international travel raising the demand for rental vehicles near airports and major city centers. Companies are localizing offerings and expanding networks across Tier-1 and Tier-2 locations.
Key players: Key players operating in the car rental market are Avis Budget Group Inc., Europcar Mobility Group SA, Enterprise Holdings Inc., The Hertz Corporation, Sixt SE, Alphabet Inc. Avis Budget Group and Enterprise Holdings currently have the largest global fleet sizes and most number of locations across airports, train stations, city centers and neighboring areas catering to business and leisure travelers.
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