Car Rental Market Will Exhibit an Impressive Size USD 311.68 Billion by 2031, Fueled by Rising Tourism, Digital Convenience, and Evolving Consumer Preferences

The Car Rental Market, valued at USD 130.45 billion in 2023, is expected to reach a staggering USD 311.68 billion by 2031. This translates to a significant compound annual growth rate (CAGR) of 11.5% during the forecast period from 2024 to 2031.

Soaring Travel and Tech-Savvy Consumers Fuel Car Rental Market Growth

Fueled by a global travel boom, both business and leisure trips are on the rise, particularly in developing economies with surging internet access. Capitalizing on this trend, car rental companies are offering user-friendly mobile apps, streamlining the booking and management process, and attracting a wider customer base. Technology plays a key role as well, with improved data management systems and online platforms enhancing service.  Furthermore, the dominance of smartphones has transformed the car rental experience. Recognizing the demand for reliable travel options, major companies are expanding globally and implementing integrated systems for efficient management.

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Rising Travel, Tech, and “Bleisure” Fuel Car Rental Boom

The car rental market is cruising at high speeds, driven by a confluence of factors. With over 60% of the world now online, a surge in tourists and business travelers (including health-conscious consumers) is fueling demand. User-friendly online platforms and apps (Uber and Sixt SE) are making rentals a breeze, while the trend of “bleisure travel” (combining business with leisure) attracts younger employees. Even stricter car ownership regulations in some regions are adding to the car rental industry’s growth.

Top Key Companies of Car Rental Market

• Enterprise Holdings Inc
• Uber Technologies Inc.
• Avis Budget Group Inc
• Hertz Global Holdings Inc
• ANI Technologies Pvt. Ltd.
• Europcar
• Carzonrent India Pvt Ltd
• SIXT
• Eco Rent a Car
• Localiza

Market Segmentation

By Application:

• Local Usage
• Airport transport
• Outstation
• Others

By Rental Duration:

• Short-term
• Long-term

By Vehicle Type:

• Luxury car
• Executive car
• Economical car
• Sports utility vehicle (SUV)
• Multi-utility vehicle (MUV)

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Economy Cars Lead the Market

In 2023, economy cars reigned supreme, grabbing a whopping 35% share of the car rental market.  Their compact size and budget-friendly pricing make them the perfect choice for navigating airports and zipping around cities.

Airport Dominates Applications

Travelers taking to the skies are the primary drivers of car rental demand.  The airport transport segment secured the largest revenue share (40%) in 2023 due to the significant rise in global air travel.

Impact of Global Events on the Car Rental Market

The ongoing war between Russia and Ukraine has had a multifaceted impact on the car rental market.  Travel restrictions, airspace closures, and economic sanctions imposed on Russia have significantly dampened tourism in the region.  This has led to a decline in car rental demand in Eastern Europe, particularly in Russia and Ukraine.  However, the impact on the global market is expected to be temporary, with car rental companies in neighboring regions potentially experiencing a surge in demand due to rerouted travel plans.

Economic Slowdown

An economic slowdown can lead to a decrease in disposable income, potentially impacting discretionary spending on travel and car rentals.  Businesses might also reduce travel budgets during economic downturns, further affecting car rental demand.  However, car rentals can sometimes be seen as a more economical alternative to car ownership during such periods. This is because consumers can avoid the costs associated with car maintenance, insurance, and depreciation.  Furthermore, car rental companies may introduce promotional offers or discounts to attract customers during economic slowdowns.

North America Is Expected To Retain Its Dominance In The Car Rental Market

The increasing number of leisure and business trips, both domestic and international, fuels market growth in North America.

A continuous shift in consumer preference towards rental services and the presence of prominent car rental companies like Avis Budget Group and Enterprise Rent-a-Car further accelerate revenue generation in the region.  Recent initiatives by service providers have led to increased service utilization in various cities.  For instance, Uber Technologies Inc. announced plans to introduce a Turo-like peer-to-peer car rental service in North America in June 2023.

The growing adoption of electric cars and rising environmental consciousness among consumers in North America are significant factors driving the market.  Over 70% of Americans reportedly prefer to rent an electric vehicle to test the technology before committing to purchasing one.

Recent Developments in the Car Rental Market:

In May 2023, Seizing the opportunity in India’s booming car rental market, Car Karlo Mobility Technologies LLP launched self-driven car rental services in Pune. Their user-friendly website and mobile app aim to simplify the car rental process for Indian customers.

In April 2022, Expanding its U.S. presence, leading global mobility provider SIXT announced plans to open new branches in Charlotte and Baltimore. This move broadens rental options for customers along the East Coast.

Key Takeaways from the Car Rental Market Study

• Comprehensive understanding of market growth drivers, restraints, and opportunities
• Detailed analysis of current market trends and projections for the coming years
• Detailed segmentation of the market by vehicle type, application, and region
• Competitive landscape assessment of key market players
• Impact analysis of global events on the car rental market

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