Car Rental Market | Acumen Research and Consulting

Car Rental Market Highlights

• Global car rental market revenue is poised to garner USD 304.1 billion by 2032 with a CAGR of 10.5% from 2024 to 2032
• North America car rental market value occupied around USD 47.8 billion in 2023
• Asia-Pacific car rental market growth will record a CAGR of more than 12% from 2024 to 2032
• Among booking type, the offline access sub-segment generated notable revenue in 2023
• Based on vehicle type, the economy cars sub-segment generated 34% car rental market share in 2023
• Development of subscription-based car rental models appeals to frequent travelers is a popular car rental market trend that fuels the industry demand

Car rental businesses provide vehicles for short-term use, catering to a variety of uses including travel, business, and leisure. These services are supplied by companies that have a fleet of automobiles ranging from economy to premium models. Customers can rent automobiles on an hourly, daily, weekly, or monthly basis, with options for self-driving or chauffeur services. The industry benefits from rising tourism, corporate travel, and urbanization by providing flexible and affordable alternatives to car ownership. Advanced technology, such as online booking platforms and smartphone apps, have made operations more efficient and convenient for users. Eco-friendly car rental options, such as hybrid and electric vehicles, are also increasing, reflecting consumer demand for sustainable travel solutions in the thriving mobility-as-a-service market.

Global Car Rental Market Dynamics

Market Drivers

• Increasing tourism and business travel globally
• Urbanization and growing preference for flexible mobility solutions
• Rising adoption of advanced technologies like apps and online booking enhances convenience
• Availability of eco-friendly rental options, including electric vehicles, attracts sustainability-conscious users

Market Restraints

• High maintenance and operational costs challenge profitability for rental companies
• Fluctuating fuel prices impact customer affordability and demand
• Stringent government regulations and licensing requirements

Market Opportunities

• Expansion of rental services into emerging markets opens new revenue streams
• Growth in electric vehicle rentals supports the push for sustainable travel options
• Partnerships with travel agencies and businesses foster long-term contracts

Car Rental Market Report Coverage

Car Rental Market Insights

During last few years, the trend of the car and automotive buying has changed the scenario. Rental cars have got the traction during last few years. Car rental service provides car and automobiles on rent for limited and small time periods. This time period may varies from few hours to weeks as per the requirement of the customer. These services are majorly located near tourist place, airports, and city. Being convenient and changing trends have increased the adoption of the car rental thus, driving the growth of the market.

The global car rental market is majorly driven by increasing number of car rental services, changing lifestyle, and increasing spending power of the people. Increasing tourism activities and continuously increasing tourism budget have supported the growth of the car rental market. During last few years, there many government are focusing on the development of the country to increase the tourism. On the other hand, high prices of the car rent in developed counters may slow the growth of the market.

Car Rental Market Segmentation

The worldwide market for car rental is split based on booking type, vehicle type, rental length, application, end users, and geography.

Car Rental Market By Booking Type

• Online Access
• Offline Access

According to car rental industry analysis, the online access category is predicted to dominate the industry, owing to the increased adoption of digital technologies and the convenience of online booking systems. Consumers increasingly choose online channels because they provide a smooth user experience with features such as price comparisons, real-time availability, and customizable options. Mobile apps and websites have changed the car rental sector by allowing customers to instantly make, change, or cancel arrangements. The combination of artificial intelligence and predictive analytics improves consumer experiences by providing tailored recommendations. Furthermore, internet booking sites often provide specials and discounts, which attract a larger audience. With the global increase in internet adoption and smartphone usage, the online segment is well positioned to retain market leadership.

Car Rental Market By Vehicle Type

• Executive Cars
• Luxury Cars
• Economy Cars
• MUVs
• SUVs

Over the car rental market forecast period the economy car sector will lead the industry with more than 34%. This dominance is due to their low cost, fuel efficiency, and widespread availability, making them an appealing alternative for budget-conscious travellers. Economy automobiles appeal to a diverse range of clients, including budget tourists, families, and business owners seeking dependable transportation at a low cost. These vehicles are popular because to their suitability for short trips, urban commuting, and small-group travel. Rental companies choose economical cars because they have lower maintenance and operating costs. Furthermore, the rise in tourism and demand for self-drive rentals has boosted their appeal, consolidating the segment's market leadership.

Car Rental Market By Rental Length

• Long term
• Short term

Short-term rentals are the most popular in the car rental market since they are versatile and easy to use for a variety of travel objectives. Short-term rentals cater to consumers who require vehicles for a few hours to several days, making them excellent for tourists, business travelers, and casual drivers. Urbanization and the increased need for on-demand mobility solutions are propelling the industry forward. Rental companies are more popular since they provide a diverse range of vehicle alternatives at reasonable pricing. The proliferation of internet booking platforms and smartphone apps has simplified short-term rentals, resulting in increased customer demand. With an increasing need for easy and cost-effective mobility, the short-term segment continues to dominate the car rental industry.

Car Rental Market By Application

• Leisure/Tourism
• Business

The leisure/tourism segment dominates the car rental market, driven by the growing popularity of travel and tourism around the world. With increased disposable incomes and the growing popularity of tailored travel experiences, tourists frequently pick rental automobiles for their flexibility and convenience. Rental companies gain from relationships with huge travel agencies, airlines, and hotels, which give seamless travel alternatives. Furthermore, the proliferation of internet booking platforms and apps has made car rentals more accessible to leisure travelers. Destinations that provide scenic drives and adventure opportunities boost demand in this industry. The business segment, while significant, is underperforming due to changing work-from-home habits and virtual meetings, which have reduced corporate travel demand.

Car Rental Market By End User

• Chauffeur-Driven
• Self-Driven

The self-driving category tops the car rental market, demonstrating a preference for convenience, privacy, and price. This feature appeals to both leisure and business travelers because it allows them to create their own schedules and itineraries without relying on a driver. The rise of app-based platforms and digital rental businesses has simplified booking processes, making self-drive rentals more accessible and convenient. Furthermore, younger generations like the autonomy and adventure that comes with self-driving possibilities. In contrast, the chauffeur-driven market is more specialized, catering mostly to high-end trips or specific business requirements. While chauffeur-driven services are still necessary for high-end clients and occasions, the adaptability and cost of self-drive solutions make them the clear choice in the broader market.

Car Rental Market Regional Outlook

North America

• U.S.
• Canada

Europe

• U.K.
• Germany
• France
• Spain
• Rest of Europe

Asia-Pacific

• India
• Japan
• China
• Australia
• South Korea
• Rest of Asia-Pacific

Latin America

• Brazil
• Mexico
• Rest of Latin America

The Middle East & Africa

• South Africa
• GCC Countries
• Rest of the Middle East & Africa (ME&A)

Car Rental Market Regional Analysis

North America dominates the global car rental market owing to the growing adoption of rental vehicles and increased investment in the countries such as the U.S. and Mexico are driving the market growth in North America. Mexico accounted significant of total North America production. Increased focus on improving fuel efficiency is compelling the manufacturers to meet the consumers’ demand that makes the car rental market growth further.

Europe accounts for the second leading share in the global car rental industry. Strict rules and regulations imposed by the European Union to limit vehicular emission are expected to offer a huge platform for the rental care companies. Furthermore, many people prefer the rental cars to travel which is also facilitating the market growth. Growing demand for rental vehicles segment is likely to affect the market growth positively during the assessment period, 2024–2032. Moreover, huge investment, presence of major players and rising demand for the car rental supported the growth of the market.

Asia-Pacific holds the fastest growth in the car rental industry owing to the presence of huge companies. Low cost, and availability of people and tourist have driven the market of car rental in Asia-Pacific region. On the other hand, LAMEA holds the lease share in the market.

Car Rental Market Players

Some of the top car rental companies offered in our report includes SIXT, Localiza, Eco Rent A Car, Avis Budget Group, Inc., Toyota Rent-a-Car, Europcar, Enterprise Holdings, Inc., The Hertz Corporation, Carzonrent India Pvt. Ltd., and AVR Qatar, Inc.