Carsharing is when individuals rent vehicles to commute short distances. This approach is very convenient, flexible, and helps reduce the number of vehicles on the road, kilometers driven, & overall car ownership costs, thereby obtaining several sustainable environmental goals. With the swiftly rising awareness regarding cost efficient & convenient mobility among people, the adoption of carsharing services is increasing rapidly across Latin America.
The Latin America Carsharing Market is projected to grow at a CAGR of around 26.02% during the forecast period, i.e., 2021-26. The growth of the market is driven primarily by the swiftly rising urban population, surging vehicle ownership costs, and the increasing affordability of carsharing services to commute across different areas. Carsharing services facilitate users to pay only for the distance they have traveled, which helps reduce travel costs and traffic congestions.
Hence, these services are gaining increasing traction across Latin America. Using these services, consumers can book, modify, and cancel their rides instantly based on their convenience. Moreover, the rapidly increasing Green House Gas (GHG) emissions, accelerating environmental concerns, and the burgeoning adoption of novel mobility solutions are anticipated to benefit the overall market growth across the region.
Several environmental & traffic congestion issues can be well-addressed with the reduced number of vehicles on the road, owing to the adoption of carsharing services, which, as a result, have emerged as an effective mobility solution among the Latin American people.
|Study Period||Historical Data: 2016-20|
|Base Year: 2020|
|Forecast Period: 2021-26|
|Countries Covered||Brazil, Mexico, Argentina, Chile, Colombia & Others|
|Key Companies Profiled||Turbi, Awto, Kinto Share, MoObie, Movmi, GEOTAB, Cambio Carsharing, Turo, Float CarShare, DiDi Colombia, Others.|
|Unit Denominations||USD Million/Billion|
Impact of Covid-19 on the Latin America Carsharing Market
The Covid-19 pandemic had a decelerating effect on most industries in 2020, where the Latin America Car-sharing Market was no exception. While the government of the regional countries imposed stringent movement restrictions & lockdowns, the demand for carsharing services fell drastically.
Besides, even when the pandemic situation seemed to improve, the governments uplifted the restrictions, yet people were afraid of sharing cars with others. In fact, the stringent norms of maintaining social distance further restrained the public from using shared vehicles.
Consequently, the overall market underwent a significant decline & massive financial losses amidst the crisis. However, with the rollout of Covid-19 vaccines, the public confidence in shared traveling increased in compliance with stringent safety measures & guidelines, which, in turn, is enabling the market to regain its usual pace in the coming years.
Based on the Model, the Latin America Carsharing Market segments into:
Of them all, the P2P model held a major market share in recent years, principally due to the easy access to private rental cars. This business model is a collaboration between car owners & car renters that enable the private vehicle owners to rent their cars that are not in regular use to those who seek vehicles across different platforms. The P2P model allows car owners to charge a rental fee & provide extra benefits like maintenance & insurance.
However, here, users cannot rent vehicles for short-distance commutes. The P2P model is gaining increasing momentum by creating a medium for owners to earn extra income. Moreover, with the emergence of this model, prominent market players are also actively participating and building such platforms to run an efficient P2P business.
On the other hand, the Business-to-consumer (B2C) model is a service where a business sells cars or services directly to consumers. This model is primarily for the benefit of a third party that provides a vehicle fleet.
Based on the Business to Consumer Model:
Here, the demand for One-Way services is anticipated to display substantial growth in the coming years, mainly due to their benefits like flexibility, accessibility, and convenience. One-way service help users rent a car from their location and leave it at any operational area. This service is gaining increasing traction, owing to the facilities like convenient intercity traveling, thereby minimizing the number of private cars and reducing traffic, pollution, & carbon emissions.
Moreover, this business model offers consumers a higher level of flexibility since the user does not have to return the vehicle at its pickup location. Therefore, more people are opting for these services and augmenting the overall market growth across Latin America.
On the other front, Free-Floating services are projected to gain increasing popularity across the region during the forecast period since this business model is associated with operators who own fleet & manage concerns about payment & on-street parking rules. In this service, users have to pick & drop the vehicle at a designated location and are charged on a time basis. Hence, leading players in the market are gaining increasing profits with this business model.
Based on the Geography, the Latin America Carsharing Market expands across:
Among all, Brazil is anticipated to observe a significantly higher prevalence of carsharing services in the coming years. It owes principally to the low quality of public transportation infrastructure in the country, which does not suffice the requirement of the public in terms of both scalabilities across different areas and quality (overcrowding, frequent delays, and poor conservation). Therefore, the demand for carsharing services is displayed as a relatively better option of conveyance, and observing increasing demand across the country. Besides, with a higher level of informal employment, carsharing is becoming an attractive way of earning income for numerous Brazilians.
The high population concentration in the country tends to reduce the idle time for shared resources, which also helps boost the carsharing business while looking from an economic point of view. Further, the Brazilian government is focused actively on expanding the country's tourism sector and laying out standard regulations for fleet managers for business operations. Hence, several market players are working on strengthening their carsharing input & extending their scalability across the country.
Owing to Increasing Collaborations with Leading Automakers in Latin America, DiDi Chuxing to Significantly Boost the Carsharing Industry through 2026
DiDi Chuxing is a prominent leader in the Latin America Carsharing Market that offers app-based mobility services to users across the region with an extensive range of vehicles like buses, taxis, bikes, & cars, among others. The leader is further collaborating with numerous automotive industry players & policymakers to put forward an approach toward solving environmental & transportation challenges using an innovative solution like Artificial Intelligence (AI). The market giant is dedicated to improving the user experience & creating safe & sustainable transportation across Latin America.
Booming Urban Population in Latin America to Soar the Demand for Carsharing Services
With the burgeoning population across Latin America, the number of daily commuters is also increasing, owing to the rising employment opportunities, income sources, and improving living standards, which, in turn, is resulting in growing traffic congestions. Hence, the demand for carsharing services, especially among people traveling to the same location daily, is anticipated to soar significantly in the coming years. Moreover, with cost-effectiveness, flexibility, & accessibility, the Latin America Carsharing Market is projected to expand further during 2021-26.
With the increasing focus on curbing carbon emissions, the governments of different countries across Latin America are laying out stringent regulations, which pictures out as a prominent driving factor for the carsharing market since the increasing adoption of carsharing services can evidently reduce these emissions, traffic congestions, & solve several environmental issues.
Hesitation in Adopting New Transportation Modes Might Hinder the Market Growth
Unawareness among people about the benefits of using carsharing services & their hesitation in switching from traditional transportation modes to carsharing services might act as growth restraints for the market in the coming years. In addition, poor infrastructure across different parts of Latin America might further impose threats to the market.
The availability of cheaper alternatives like shuttles & micro-transit, carpooling & vanpooling, rise splitting, & among various others, can also challenge the market growth. Moreover, reluctance in sharing rides with strangers, excessive travel costs, & other such factors are other crucial aspects expected to hamper the market growth during 2021-26.
Potential Growth Opportunities
Mounting Adoption of Autonomous & Electric Vehicles to Boost the Market through 2026
The emergence & increasing adoption of autonomous & electric vehicles across Latin America is projected to create remunerative growth opportunities for the Latin America Carsharing Market during 2021-26. Several fleet managing companies are likely to adopt these vehicles and eliminate the requirement for drivers to operate the car. In addition, with enhanced connectivity & better services in autonomous vehicles, the prices of shared cars are anticipated to fall marginally and gain increasing adoption among Latin Americans in the coming years.
Moreover, the increasing inclination toward electric vehicles across the region would also emerge as an area of lucrative growth opportunities for the leading market players. It owes principally to the reduced cost of these vehicles in shared mobility due to no fuel expenses.
According to MarkNtel Advisors, the leading industry players in the Latin America Carsharing market are Turbi, Awto, Kinto Share, MoObie, Movmi, GEOTAB, Cambio Carsharing, Turo, Float CarShare, DiDi Colombia, Others.
Key Questions Answered in the Market Research Report:
Market Outlook, Segmentation, and Statistics