The car rental service market size is projected to reach a value of USD 3,09,703.4 million in 2024, at a CAGR of 7.3% from 2024 to 2034. Car rental service sales are likely to be USD 6,25,867.4 million by 2034.
Growth can be analyzed by new opportunities in the travelling progress due to working and recreational trips. Moreover, the availability of travel platforms and online booking services has made renting cars easy. It seems that the ‘business-meets-leisure’ or ‘bleisure’ concept is all set for growth as companies are focusing on improving the overall wellbeing of their workers and reduced stress. For instance, in April 2024, Tumodo a B2B travel platform was launched in India. This region holds great prospect for both the commercial and tourism industries.
Due to the rise of business and tourism travel during the COVID-19 pandemic, there is an increased demand for leisure and recreational activities for work-life balance. Also, improved mental health consumer consciousness has improved the need for work from home, increasing the need to rent cars. Another important attribute is the competition linked to strictly adhered rules of the transparent policies implemented by the rental service businesses. These companies have made it mandatory from the drivers to provide the health data. This, in turn, would boost their customer engagement, generating revenue.
Due to these factors, businesses and corporate companies are pushing young generation to maintain a healthy work-life balance. Also, the rules provided by the governments and limitations concerning car ownership in various regions are contributing to car rental business. The rise of online rental platforms and the integration of new technology, such as near-field communication mobile gadgets, are boosting the market. Emerging companies like Zipcar and Bla Bla Car are thriving due to innovative ideas like car renting and pooling.
Partnerships with ridesharing and mobility platforms are increasing, and leisure travelers are being incorporated into vacation packages.
| Attributes | Description |
|---|---|
| Estimated Global Car Rental Service Market Size (2024E) | USD 3,09,703.4 million |
| Projected Global Car Rental Service Market Value (2034F) | USD 6,25,867.4 million |
| Value-based CAGR (2024 to 2034) | 7.3% |
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The table below highlights the projected CAGRs for the global car rental service industry over semi-annual periods ranging between 2023 and 2024. The analysis offers businesses with a better analysis of the growth over the year by revealing acute shifts in performance and growth patterns.
The industry is projected to report a CAGR of 23.5% in the first half (H1) of the decade from 2023 to 2033 and -6.9% in the second half (H2) of the same decade, indicating a turbulence in sales trajectory.
| Particular | Value CAGR |
|---|---|
| H1 | 23.5% (2023 to 2033) |
| H2 | -6.9% (2023 to 2033) |
| H1 | 8.8% (2024 to 2034) |
| H2 | 5.8% (2024 to 2034) |
The global market’s growth trajectory is estimated to shift during the succeeding decade. Predictions indicate that the CAGR is estimated to upsurge from 8.8% to 5.8% in the observation period.
According to industry experts, car rental companies face competition, high startup costs, strict government rules, and changing fuel and insurance prices, leading to price cuts and lower profit margins.
Use of Online Car Rental Services and Ride-Sharing to Boost Car Rental Companies’ Revenue
Car rental is gaining popularity around the world as it is convenient and easily accessible. They can be rented through the company’s websites, booking aggregators, and social media platforms. Few of the leading businesses include Lyft, Gojek, Uber, and BlaBlaCar.
As these apps are easily accessible and the number of smartphone users is burgeoning, the demand for these rental services is predicted to grow. These services are expected to witness lucrative opportunities as they undertake strategies like seasonal offers and discounts, boosting growth.
Preference for Affordable Rides to Reshape the Car Rental Service Businesses
The demand for a number of rental cars is growing with the rising needs for travel and tourism. Other drivers include favorable government policies as well as environmental considerations.
Affordable traveling by taxi and car hire are economical rental services. Governments, especially in developing economies, are encouraging rental car management systems as affordable mobility solutions while emphasizing the need to lower vehicle emissions.
The expansion of rental car services is being driven by the advent of low-cost automobile rental services via websites and mobile applications, as well as rising spending capabilities.
Subscription-based Models: An Emerging Trend for Car Rental Service Companies
There are numerous frequently used strategies by key companies, such as subscription rental plans. Several companies are currently into rental subscriptions, including Hertz, and Enterprise, and Sixt+.
The rental plan for cars is normally a five-year plan. The option of subscription rentals gives benefits like longer rental periods, an opportunity to interchange vehicles, assistance in case of emergencies on the road, and reduced costs on maintenance and insurance.
While the specifics of the rental subscription plans can differ, they generally cover essential needs. This trend is especially beneficial for those who need a vehicle for extended periods without the commitment of ownership.
Principal Consultant
The global car rental service industry was valued at USD 1,19,317.8 million in 2019 and witnessed growth at a CAGR of 6.5% from 2019 to 2023. As per the report, car rental service sales reached a value of USD 1,53,400.7 million in 2023.
Between 2019 and 2020, the global demand for automobile rental services grew steadily due to urbanization and convenience in tourist destinations.
However, the pandemic slowed travel due to travel restrictions, and health concerns led to the launch of self-driving cars. For instance, in July 2022, Las Vegas-based startup Halo.Car launched a free transportation service in downtown Las Vegas, allowing customers to rent electric cars operated by a remote driver.
The trend towards sustainable mobility is driving the rise of eco-friendly electric cars, driven by consumer expectations for enhanced safety, personalized services, and seamless digital interactions, which is expected to boost rental demand.
The industry is projected to reach USD 3,09,703.4 million by 2024 and is anticipated to register a CAGR of 7.3% during the forecast period. The demand is predicted to reach USD 6,25,867.4 million by 2034.
From 2024 to 2034, the global market for automobile rental services is expected to expand. New business strategies, shifting consumer tastes, and new technology will all contribute to this expansion.
Operations, fleet management, and customer experiences will all be improved with the use of AI and data analytics. Virtual assistants and AI chatbots will provide prompt customer service and personalized suggestions.
By modifying prices in response to market developments and demand, predictive pricing can assist optimize revenue. As sustainability gains importance, the sector is expected to witness an increase in electric and self-driving vehicles. Businesses will distinguish out in the market because of this emphasis on sustainability.
Market leaders with revenues over USD 61,360.3 million are referred to as tier 1 enterprises. These key companies stand out due to their wide range of products and superior manufacturing capacity.
These companies in the business are notable for their diverse geographic reach, loyal client base, and extensive knowledge in providing these services. Enterprise Rent-A-Car, Hertz, Avis Budget Group, Sixt SE, and Europcar are some notable brands in tier 1.
Alamo Rent A Car, National Car Rental, Thrifty Car Rental, Dollar Rent A Car, and Zipcar are notable names in tier 2. These tier 2 enterprises generate around USD 53,690.2 million in sales. These mid-size players may not have cutting-edge technology or a broad global reach; however, they offer decent services and comply with regulations.
Tier 3 includes the majority of small-scale companies operating at the local presence and serving niche markets having revenue of USD 38,350.1 million. These companies are notably oriented towards fulfilling local market demands and are consequently classified within the tier 3 share segment. Players such as Fox Rent A Car, Turo (peer-to-peer), Getaround, U-Save Car & Truck Rental, Payless Car Rental and others are categorized as tier 3 segment.
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The section provides a comprehensive industry overview, examining emerging trends and opportunities on a country-by-country basis, aiming to help organizations comprehend the intricate nature of the business.
The demand from Germany is anticipated to report a CAGR of 2.4%; on the other hand, the demand from India is foreseen to register a CAGR of 10.1%.
| Countries | CAGR 2024 to 2034 |
|---|---|
| India | 10.1% |
| Germany | 2.4% |
| Spain | 5.9% |
| Australia | 5.8% |
| United States | 3.7% |
| Canada | 4.0% |
| China | 9.3% |
The rental car service industry in the United States is expected to generate a CAGR of 3.7% from 2024 to 2034. An increasing number of people in the United States are anticipated to start using electric vehicles in the coming decade.
Car rental services in the United States are likely continue to expand due to shifts in customer preferences and the presence of key players like Hertz, Enterprise, Avis, and Getaround.
With an increasing number of business and holiday visits, the United States vehicle rental sector is anticipated to witness growth over the upcoming decade. These businesses may increase their visibility and draw in even more clients by collaborating with hotels, airlines, travel agents, and online travel platforms.
Favorable government investments in tourism and a rise in foreign visitors are expected to propel the rental vehicle service sector in India. Sales of car rental services are expected to register a CAGR of 10.1% between 2024 and 2034. The flexibility of travel plans for tourists and the ease of automobile rentals for business and conference-related visitors are the main drivers.
The government's promotion of India as a major spiritual destination is another driver fueling car rental services’ demand. For instance, in August 2023, the Ministry of Industry and Commerce proposed collaboration with Latin America and the Caribbean to boost tourism and revenue. Furthermore, India's better road infrastructure and easier access to luxury vehicles are providing a boost the key companies.
The demand for rental vehicles in Germany is projected to register growth at a CAGR of 2.4% over the forecast period. Transport establishments in Germany are focusing on collaborative efforts with tech-startups and other leading IT companies to cater to the demand.
For instance, in March 2023, Munich Airport collaborated with turnaround service provider Assured Europe and Norwegian start-up Wenn AS to integrate AI to enhance its car rental experience.
A scanning tunnel has been installed in a German hub's car rental center, automating vehicle condition documentation and damage detection. Around 60,000 vehicles have used it, saving time and ensuring transparency, with plans for global implementation.
The section explains the growth trajectories of the two leading segments. In terms of car type, the economy cars will likely dominate the market and generate a share of 32.4% in 2024.
Additionally, based on the end use, the on-airport segment is likely to account for 43.2% of share in 2024.
| Segment | Economy Cars (Car Type) |
|---|---|
| Value Share (2024) | 32.4% |
Economy cars are the most popular mode of transport in the global car rental market due to their affordability and availability. In 2024, the economy cars segment is estimated to account for 32.4% of revenue share.
While business and leisure travelers prefer luxury and premium rental services, most riders opt for economy cars. The sharing and pooling concept attracts customers preferring affordable rides. More people are becoming aware of health and environmental issues, which encourages them to use eco-friendly options like shared cabs or car rentals. These services help reduce air pollution, improving their demand.
| Segment | On-Airport (End Use) |
|---|---|
| Value Share (2024) | 43.2% |
The on-airport segment dominates the global car rental services market, accounting for 43.2% in 2024. This is due to the popularity of the on-airport segment among international and domestic tourists, who rely on it for leisure and business travel.
Airport authorities across the globe are utilizing sustainable and eco-friendly methods, such as electrical cars and buses. For instance, in February 2024, Edmonton International Airport (YEG) debuted its first fleet of hydrogen fuel cell electric vehicles (FCEVs) with zero emission in Alberta, Canada.
The convenience and accessibility of rental cars within airport premises is expected to drive its demand, making it a preferred choice for travelers worldwide.
To gain a competitive edge, key businesses are expanding their product portfolio by introducing new cars and models. This would increase availability and attract more customers.
Offering great customer service through technology, like easy-to-use mobile apps and tailored support, can help businesses grow. Expanding into areas with high tourism, urban growth, or limited service can be an effective approach.
Working with other players in the travel and transportation industry, such as airlines, hotels, travel agencies, or online travel sites, can create helpful partnerships. Joint marketing and promotions can improve brand visibility and attract more customers.
Adopting new technologies like vehicle tracking, automated check-in/out systems, and digital payment methods is essential for success.
Industry Updates
In terms of car type, the industry is categorized into economy cars, compact cars, intermediate cars, premium cars, luxury cars, and others.
The service's end use is diverged into intercity, intracity, on-airport, and other sectors.
Based on the mode of booking, the services are trifurcated into offline access, mobile application, and other internet access.
The industry employs sectors such as organized and unorganized.
The industry is spread across North America, Latin America, Europe, South Asia, East Asia, Oceania, and Middle East and Africa.
The market is predicted to reach USD 3,09,703.4 million in 2024.
It is estimated to reach USD 6,25,867.4 million by 2034.
Renting a car offers superior convenience with flexible pick-up/drop-off locations and no scheduling concerns.
Enterprise Rent-A-Car, Hertz, Avis Budget Group, Sixt SE, and Europcar are a few players.
It will likely rise at a CAGR of 7.3% from 2024 to 2034.
India is anticipated to dominate with a CAGR of 10.1% during the forecast period.
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