According to the Market Statsville Group (MSG), the global car rental market size is expected to grow from USD 99,430.49 million in 2022 to USD 1,71,849.96 million by 2033, growing at a CAGR of 5.1% from 2023 to 2033. The increasing popularity of smartphone-based online rental car booking apps, the car rental business has gotten a lot of attention. Customers can hire automobiles from firms for a short or long amount of time. The bulk of these services are available in tourist areas and tier 1 and 2 cities. Increasing pollution and automobile prices, as well as cost-effectiveness, are important factors driving this market's rapid rise. The industry is fast establishing itself as a vital vertical in the transportation industry, benefiting not only customers and rental firms, but also manufacturers.

Furthermore, the industry is being driven by economic growth and greater use of luxury automobiles in business trips by corporations worldwide. Another aspect fostering growth is the expansion of the tourist industry. People are going out of their way to spend meaningful time with their family. The continuous digital revolution has had a significant influence on the automobile rental business. The internet platform has enabled customers to share more information, opening up new avenues for vehicle rental firms to reach out to them. Retailers are utilizing new technology to differentiate their business and provide superior services to their customers.

Definition of the Global Car Rental Market

Car rental or car hire agencies are agencies that rent automobiles for a short period of time at a certain cost. This service is frequently organized with multiple local branches, which are typically located around airports or big city areas and are supplemented with a website that allows online bookings. With increased pollution and population, the automobile rental sector has seen a significant shift in recent years, becoming one of the most prominent industries in fleet transportation.

Manufacturers and customers rely on cost-effective automobile rental schemes such as leasing cars from their owners for three years and then renting these cars through app-based reservations. Furthermore, automobile rentals significantly reduce pollution by lowering the volumetric sales of owned vehicles. Furthermore, with an increase in air traffic and an increase in the trend of online auto booking, car rentals are the preferred means of transportation for travelers, since cars are the most cost-effective and time-efficient ways of transportation. These benefits drive exponential expansion in the automobile rental business.

COVID-19 Impact on the Global Car Rental Market

The COVID-19 pandemic has resulted in nationwide lockdown in most of the major economies including China, Japan, the UK, Germany, and a few parts of the U.S. International traveling was banned for a prolonged period of almost 7 to 8 months, which had a significant impact on the global tourism industry. This, in turn, has severely affected the rental business. The pandemic had a severe impact on the top global rental companies resulting in loss of market share, decrease in rankings, market volatility, and downgrades. In addition, In May 2020, the global car rental leader Hertz filed bankruptcy after the demand for rental cars vanished due to the lockdown. The company had to lay-off its major share of employees and dispose of its non-relevant assets.

Moreover, the lockdown has resulted in a significant drop in air traffic as both domestic as well as international traveling was restricted during the pandemic. Airlines were only selling 51% of available seats in order to preserve social distance, resulting in a total passenger reduction of nearly 2.89 billion and a loss of around USD 391 billion in airline revenue. This high decline in travelers had a significant influence on the airport taxi sector, with a drop of more than 30% during the epidemic. Almost all large enterprises' rental income were severely hindered. For example, Avis Budget Group had a 42% reduction in market revenue compared to 2019, Europe Car saw a 42% drop, and Hertz rental saw a 56% drop in revenue before declaring bankruptcy in Q3 2020.

Global Car Rental Market Dynamics

Drivers: Growing millennials population will drive the market’s growth

Millennials, who are quickly becoming the country's largest generation, are principally responsible for the expansion. The Indian population is younger than 30, and young folks prefer to rent a car to travel interstate for weekend vacations rather than possess one. Because of the high expense of maintaining staff vehicles, millennials own fewer cars. Many consumers are attracted to automobile rental because of its cost-cutting and fuel-saving benefits. As a result, demand for automobile rentals has risen, mostly for leisure and short-term excursions.

Furthermore, millennials are attracted to automobile rental due to benefits such as cost savings and fuel economy. In industrialised nations, the rise in demand for ride hailing services and amenities such as automobile rental, car sharing, and station-based mobility has reduced private car ownership by 80%. For example, the number of passenger automobiles on American highways is predicted to fall from $247 million to $44 million by 2030 as the usage of electric ride-sharing services grows. Furthermore, purchasing a new automobile and maintaining it is more expensive than renting a vehicle on an annual basis. Thus, the gradual penetration of such automobile ownership (4% in emerging nations) every year is expected to stimulate global demand in the future years. Hence, lower rate of car ownership among millennials drives the growth of car rental market.

Restraints: Surging crude oil prices will increase the prices of the rental cars

The automotive & transportation industry has a direct impact on the fluctuation in crude oil prices. High gasoline and diesel prices in several developing countries act as a key restraining factor for offering a car on rent as the rental prices cannot be changed frequently depending on the crude oil prices and eventually the rental companies face fluctuation in the profits. For instance, the per-barrel price for crude oil was USD 17 in 2000, which was increased to USD 45 in 2020 due to increasing demand globally.

Moreover, government taxes lift gasoline and diesel prices, considerably affecting the global industry. Such factors directly or indirectly affect the pricing strategy of car rental service providers and result in increasing rental car prices or growing demand for public transport, hampering the market’s growth.

Opportunities: Adoption of car rental management software ana penetration of AI

On a worldwide scale, the automobile rental sector is expanding significantly. Many big businesses have already joined the industry and established significant market positions, but there is still room for more entrants. By enhancing their operations and implementing new automated technology, all market participants are taking steps to deliver better offers and services in order to increase reservations. Furthermore, automobile rental companies use car rental management software to improve their services and automate their operations.

The adoption of car rental management software creates lucrative opportunities for the market’s growth. A car rental management system is a web-based platform that opens up new opportunities for car rental service provider company. It enables them to manage the car rental business, plan work, streamline routine operations, and receive detailed reports. Installation of the car rental reservation system to get all the functionalities in one place.  The car rental management software minimizes the task of management and boosts the efficiency of operation. Further, management software also provides features such as fleet optimizations, advanced pricing management, and custom reports, which, in turn, helps car rental companies to grow their business. Thus, adoption of car rental management software holds a remarkable growth opportunity for the car rental market players for market expansion.

Scope of the Global Car Rental Market

The study categorizes the car rental market based on type, and application area at the regional and global levels.

By Type Outlook (Sales, USD Million, 2019-2033)

• Luxury Cars
• Executive Cars
• Economy Cars
• SUV Cars
• MUV Cars

By Application Outlook (Sales, USD Million, 2019-2033)

• Online Bookings
• Offline Bookings

By Region Outlook (Sales, USD Million, 2019-2033)

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • Italy
  • France
  • UK
  • Spain
  • Poland
  • Russia
  • The Netherlands
  • Norway
  • Czech Republic
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Indonesia
  • Malaysia
  • Thailand
  • Singapore
  • Australia & New Zealand
  • Rest of Asia Pacific
• South America
  • Brazil
  • Argentina
  • Colombia
  • Rest of South America
• The Middle East & Africa
  • Saudi Arabia
  • UAE
  • South Africa
  • Northern Africa
  • Rest of MEA

Economy Cars segment accounts for the largest market share by type

Based on the type, the market is divided into luxury cars, executive cars, economy cars, suv cars and muv cars. The economy cars segment is expected to dominate the market share in 2022 in the global car rental market. The economy car category accounted for 42.6% of the market in 2022 and is predicted to maintain its dominance throughout the forecast period. The small size and cost-effectiveness of these automobiles are two of the primary elements fueling the rise of this market. As a result, inexpensive automobiles are becoming more popular for airport and intra-city transport. The sector of inexpensive autos is expected to remain dominant. This sector is expanding as a result of numerous significant qualities, including its small design, fuel efficiency, and degree of comfort. Furthermore, economic vehicles have lower acquisition and maintenance expenses than luxury and executive vehicles.

North America is expected to witness the largest market share by Region

Based on the regions, the global car rental market has been segmented across Europe, North America, the Middle East & Africa, Asia-Pacific, and South America. North America is projected to account for the highest market share of 36.7% in 2022. The presence of several of the region's largest automobile rental companies, including Avis Budget Group and Enterprise Rent-a-automobile, is expected to create attractive expansion potential. The increasing number of corporate and leisure visitors to the region is also a major driver of regional growth. Furthermore, the region is home to a number of major tourist destinations that attract a large number of travelers who want automobile rental services, boosting market growth.

Competitive Landscape: Global Car Rental Market

The car rental market is a significant competitor, and extremely cutthroat in the sector are using strategies including product launches, partnerships, acquisitions, agreements, and growth to enhance their market positions. Most sector businesses focus on increasing their operations worldwide and cultivating long-lasting partnerships.

Major key players in the global car rental market are:

• Europcar (Europcar Mobility Group)
• The Hertz Corporation
• Carzonrent India Pvt Ltd
• Avis Budget Group
• Enterprise Rent-A-Car (Enterprise Holdings, Inc.)
• SIXT
• Al-Futtaim
• Localiza
• Midway Car Rental
• FAST RENT A CAR
• TTcar Transit
• Zoomcar India Private Ltd
• Company 13
• Company 14
• Company 15

Recent Development

• In February 2022, Hertz Expands Global Electric Vehicle Commitment with New UFODRIVE Partnership. UFODRIVE is the first all-digital, all-electric car rental service controlled from an app. Its advanced eMobility SaaS Platform makes transitioning to electricity easy for both customers and fleet providers, delivering lean operations, lower energy costs, better charging and optimal fleet utilization using advanced AI tools. UFODRIVE's technology delivers a two-minute "arrive and drive" entirely digital EV customer experience.
• In September 2021, Enterprise Holdings has working with Microsoft to bring connected car technology to Enterprise’s car rental, exotic vehicles, and commercial truck rental fleets in the U.S., and soon the U.K. and Canada.
• In June 2021, Localiza had launched a platform for app drivers, Zarp Localiza. The platform brings together services, including an app that centralizes all services related to car rental. With Zarp, Localiza strengthens its business arm specifically focused on app drivers, with products aimed at these professionals, such as mileage rental plans and benefits such as fuel discounts. In addition to the app, Zarp will also have exclusive agencies and a call center.

Key Issues Addressed

• What is the market size by various segmentation of the car rental by region and its respective countries?
• What are the customer buying behavior, key takeaways, and Porter's 5 forces of the car rental market?
• What are the key opportunities and trends for manufacturers involved in the car rental supply chain?
• What are the fundamental dynamics (drivers, restraints, opportunities, and challenges) of the market?
• What and how regulations, schemes, patents, and policies are impacting the growth of the market?
• What are the upcoming technological solutions influencing market trends? How will existing companies adapt to the new change in technology?
• The market player positioning, top winning strategies by years, company product developments, and launches will be?
• How has COVID-19 impacted the demand and sales of car rental in the global market? Also, the expected BPS drop or rise count of the market and market predicted recovery period.
• Detailed analysis of the competitors and their latest launch, and what are the prominent startups introduced in the target market? Also, detailed company profiling of 25+ leading and prominent companies in the market.