The Global Car Rental market is projected to grow at a CAGR of around 7% during the forecast period of 2023-28, cites MarkNtel Advisors in the recent research report. Tourism is a rapidly growing industry, especially in countries like China, the UAE, France, etc., and this has been a major driver for the market across the globe. According to World Travel and Tourism Council, the growth rate of the global travel & tourism sector outpaced the growth of the global economy for nine consecutive years prior to the COVID-19 pandemic. During the pandemic, the industry witnessed a downfall of nearly 50.4%, and later on, it recovered by around 21.7% in 2021. As more individuals travel globally, they seek convenient means of transportation, owing to which they opt for car rental services. Moreover, many countries, like Saudi Arabia, Qatar, Thailand, Singapore, etc., are implementing plans to boost their sector. The plans by different countries to boost tourism are leading to increased investment in theme parks, new hotels, resorts, etc., and as the number of tourists increases there would be a high requirement for rental cars to explore these places, which would augment the market growth during the forecast period.
Moreover, in European countries like Sweden, the Netherlands, and part of the UK, the ownership of private cars is declining. For instance, as of 2022, the rate of car ownership in London is much lower compared to the rest of the UK, with an average of around 0.74 cars per household. Therefore, the declining rates of car ownership in certain regions would provide a new opportunity for rental car companies to offer their services to individuals who do not own a car but require cars occasionally.
Furthermore, many car rental companies are now operating in partnership with ride-hailing services by providing vehicles, which is helping them to expand the demand for their rental services & generate additional revenues. Furthermore, many rental companies are now operating in partnerships with ride hailing services by providing vehicles, which is helping them to upsurge the demand for their rental services & generating additional revenues. The partnership between them is expected to grow as both of them look forward to stay competitive in the rapidly evolving transportation sector, which subsequently would support the market growth during the forecast period, further states the research report, “Global Car Rental Market Analysis, 2023.”
Economy Cars to Exhibit Considerable Growth Rate
Based on the vehicle type, the market is further bifurcated into Luxury Cars, Economy Cars, Executive Cars, Sports Utility Vehicles (SUVs), and Multi Utility Vehicles (MUVs). Compact size & cost-effectiveness have led to the significant adoption of economy cars. Airport & intracity rides are the major purposes for which economy rental cars were used in Asia-Pacific & Europe. Economy cars can be maneuvered easily in congested streets & parked in tight places, owing to which they are preferred by individuals living in the urban areas of this region. Moreover, they are the cheapest option available & also provide better mileage, due to which customers who want to go on long journeys refer to these cars. Thus, the low cost & better mileage provided by them would continue to support the Car Rental market growth during the forecast period.
North America to Witness Substantial Growth
In Countries like the US, Canada, and Mexico, there are a large number of business establishments & owing to this, individuals' movements for domestic business trips, conferences, client meetings, etc., are high in the region. Hence, there is a surge in demand for rental cars, as they are the most cost-effective way to travel. Furthermore, rental car companies like Avis Budget Group, Enterprise rent-a-car, etc., have a well-established network in the region as most customers or individuals prefer or are inclined towards rental cars. Additionally, the surging focus on sustainable development by business establishments is enhancing the for electric rental cars & is presumed to create lucrative opportunities for the growth of the market growth during the forecast period.
With strategic initiatives, such as mergers, collaborations, and acquisitions, the leading market players, including Avis Budget Group Inc., Sixt SE, Enterprise Holdings (Alamo), Hertz Corp., Europcar, Localiza, Carzonrent India Pvt. Ltd. (CIPL), ZoomCar, Inc., Dollar Rent a Car, Green Motion, Buchbinder, etc., are looking forward to strengthening their market position.
Key Questions Answered in the Research Report