Car Rental Market Size, Share & Trends Analysis Report By Vehicle Type (Luxury Cars, Executive Cars, Economy Cars, SUVs, MUVs), By Application (Local Usage, Airport Transport, Outstation), By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global car rental market size was valued at USD 98.14 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 4.6% from 2021 to 2028. A significant rise in the number of people taking business and leisure trips across the globe is driving the demand for car rental services, thereby propelling the industry’s growth. Rising internet penetration across developing as well as developed countries have further helped companies in the market capture a larger customer base with the help of dedicated mobile apps for the convenience of customers. Technology is considered to be a crucial factor driving market growth. The impact of technological advancements has revolutionized the industry in the recent past. Improved customer and corporate information management and hassle-free internet booking applications are the two prominent ways assisting car rental service operators to offer enhanced services to their customers. The increasing reliance of users on smartphones for carrying out various tasks traditionally done by computers has transformed the car rental experience for customers.

There has been a significant increase in global travel across the world over the last decade. Global commuters are increasingly demanding familiar, reliable, and high-quality travel services during their travel. Some of the key car rental operators are attempting to leverage this trend by expanding their brand and distribution platforms on a global level. The implementation of an integrated global car rental system is anticipated to enable these operators to manage their geographically dispersed business operations.

An emerging trend in the travel and tourism industry is the evolution of ’bleisure’. This relatively new term describes a combination of leisure travel with a business trip and is gaining popularity across the globe. Bringing the family on corporate trips is becoming more acceptable since companies follow this trend to aid employee retention and alleviate some of the key road warriors’ stress. This incentive is increasingly appealing to recruits as younger employees are generally becoming business travelers. This concept is particularly advantageous for international trips where employees can get acquainted with locations, especially essential business details.

The rapid spread of COVID-19had a significant impact on the overall tourism sector in 2020, which, in turn, affected the car rental market. Additionally, a decrease in air traffic across the globe has resulted in low demand for car rentals at airports. To ensure safety and avoid transmission of the virus, car rental operators are following hygiene and safety norms such as disinfecting their vehicles after each ride. Some car rental operators are providing free hand sanitizers and masks to their customers. Key competitors in the market, including Hertz and Avis, have disposed of their older cars at a higher volume during the pandemic than usual to make these transactions a source of revenue generation.

Vehicle Type Insights

Based on vehicle type, the market is segregated into luxury cars, executive cars, economy cars, SUVs, and MUVs. The economy cars segment accounted for the largest share of over 33.0% in 2020 and is expected to retain its dominance over the forecast period. Some of the prime factors driving the growth of this segment are the compact nature and cost-effectiveness of these cars. As a result, economy cars are increasingly preferred for airport and intra-city travel.

The executive cars segment is anticipated to register a CAGR of over 5.5% from 2021 to 2028. The increasing number of business travelers across the globe, specifically in developing countries, is one of the prime factors boosting the growth of the segment. Additionally, these vehicles offer customers a combination of premium features at reasonable pricing, accelerating their demand among corporate travelers.

Application Insights

On the basis of application, the market is segmented into local usage, airport transport, outstation, and others. The airport transport segment dominated the market in 2020 and accounted for over 40.0% of the revenue share. It is expected to retain its dominance over the forecast period. A significant increase in air travelers globally in recent years is anticipated to boost the segment growth. Considering this trend, numerous car rental operators are expanding their fleet and promoting services across major airports. Leading market participants have their presence at airports, wherein customers can avail of round-the-clock car rental services, ultimately driving the segment growth.

The local usage segment is expected to register the highest CAGR of approximately6.5% from 2021 to 2028. Standard timings and lack of route flexibility of public transport have resulted in shifting preference of tourists toward car rental services for day-to-day navigation, driving the growth of the segment. In addition, several market participants offer customers the option of choosing the vehicle at their convenience.

Regional Insights

North America accounted for the largest market share of approximately 52.0% in 2020, with the U.S. being the largest market. The presence of some of the leading car rental operators in this region, such as Avis Budget Group and Enterprise Rent-a-Car, is anticipated to provide lucrative growth opportunities. The increasing number of business and leisure trips across the region is also a critical factor propelling regional growth. Additionally, the region includes numerous popular tourist destinations that attract a large number of travelers that require car rental services, ultimately boosting the market growth.

The market across the Asia Pacific region is expected to register the highest CAGR of almost 8.0% from 2021 to 2028. Rising disposable incomes of consumers and steadily growing economies, and rising expenditure on business travel are expected to impact the regional market growth favorably. The markets in China and India are expected to grow exponentially over the forecast period. Government bans on car purchases in certain parts of China, in an attempt to address the rising issues of pollution and traffic, are anticipated to encourage people to opt for car rental services.

Key Companies & Market Share Insights

The global market is moderately fragmented and is characterized by the presence of a large number of international and local players. Key car rental players are anticipated to focus on expansion strategies to gain regional market share, create brand awareness, and penetrate developing markets. The main focus of these players is on enhancing their services to maximize profitability and gain a larger customer base. A strategic partnership is another critical strategy implemented by market participants to strengthen their hold on the market. For instance, in 2020, AirAsia India, an Indian airline, entered in a partnership with Avis India, a provider of mobility solutions for corporate and retail users, in an attempt to provide customers with discounted car rental services and numerous other benefits, including self-drive cars, airport transfers, and chauffeur-driven cars. Some of the prominent companies operating in the car rental market are:

• Enterprise Rent-A-Car

• The Hertz Corporation

• Sixt

• Europcar

• Avis Budget Group

Car Rental Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2028. For this study, Grand View Research has segmented the global car rental market report based on vehicle type, application, and region:

• Vehicle Type Outlook (Revenue, USD Million, 2018 - 2028)

  • Luxury cars

  • Executive cars

  • Economy cars

  • SUVs

  • MUVs

• Application Outlook (Revenue, USD Million, 2018 - 2028)

  • Local usage

  • Airport transport

  • Outstation

  • Others

• Regional Outlook (Revenue, USD Million, 2018 - 2028)

  • North America

    • U.S.

  • Europe

    • France

    • Germany

    • U.K.

  • Asia Pacific

    • Japan

    • Korea

    • China

    • India

  • South America

  • Middle East & Africa