Car Rental Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The Car Rental Market is segmented by Booking Type (Offline Access and Online Access), Application Type (Leisure/Tourism and Business), Vehicle Type (Luxury/Premium Car and Economy/Budget Cars), End User (Self-driven and Chauffeur-driven), Rental Length (Short Term and Long Term), and Geography (North America, Europe, Asia-Pacific, South America, and Africa). The report offers the market size and forecasts in value (USD billion) for all the above segments.

Car Rental Industry Overview

Car Rental Market Summary
Study Period: 2018 - 2028
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: > 11 %

Major Players

Car Rental Market Major Players

*Disclaimer: Major Players sorted in no particular order

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Car Rental Market Analysis

The Car rental market accounted for USD 119.28 billion in 2021, and it is expected to reach USD 223.07 billion by 2027, projecting a CAGR of more than 11% during the forecast period (2022 - 2027).

The COVID-19 pandemic hindered the growth of the car rental market owing to travel restrictions and the shutdown of several tourist agencies and car rental service providers. The restrictions have been lifted across the world and the car rental market started recovering by end of 2021 owing to consumer inclination for rental services across major countries in the North American and European region.

However, the growth is slow-paced and nominal. For instance, according to UNWTO, tourists entering Europe and North America recorded the strongest increase in 2021 compared to 2020 (+19% and +17% respectively). Southern Mediterranean Europe (+57%) and Central Europe (+54%) enjoyed a significant rebound but remain 54% and 56% down on 2019 levels respectively. North America (+17%) and Central Eastern Europe  (+18%) also climbed above 2020 levels.

Meanwhile, Africa saw a 12% increase in arrivals in 2021 compared to 2020, though this is still 74% below 2019. In the Middle-East region arrivals declined 24% compared to 2020 and 79% over 2019. In Asia- Pacific region arrivals were still 65% below 2020 levels and 94% when compared to pre-pandemic values as many destinations remained closed to non-essential travel.  
According to the latest UNWTO panel of experts most tourism professionals (61%) expect a rebound in 2022, mostly during the third quarter where major contributor to be domestic tourism and , 42% point to a potential rebound in 2023 and 2024 due to full fledged arrival of international tourists.

The market in North America is expected to dominate the global market in terms of revenue, and it is expected to continue its dominance over the forecast period. This can be attributed to the increasing number of business trips and local and international vacation trips across various countries in this region.

Asia-Pacific is expected to register significant growth in terms of CAGR over the forecast period, owing to increasing travel and tourism and increasing availability of high-end luxury and economy vehicles, especially across developing countries in this region.

Car Rental Industry Segments

A car rental, hire car or car hire agency is a company that rents automobiles for short periods of time to the public, generally ranging from a few hours to a few weeks. The car rental market report covers the latest trends, COVID-19 impact, and technological developments in the market. 

The car rental market is segmented by booking type, application type, vehicle type, end-user, rental length, and geography. By booking type, the market is segmented into offline access and online access. By Application type, the market is segmented into leisure/tourism and business. By Vehicle Type, the market is segmented into luxury/premium cars and economy/budget cars. 

By End-user, the market is segmented into self-driven and chauffeur-driven. By rental length, the market is segmented into short-term and long-term. By geography, the market is segmented into North America, Europe, Asia-Pacific, South America, and Africa. For each segment, the market sizing and forecasts have been done on the basis of value (USD billion).

Booking
Offlne Access
Online Access
Application
Leisure/Tourism
Business
End User
Self-driven
Chauffeur-driven
Vehicle Type
Economy/Budget Cars
Luxury/Premium Cars
Rental Length
Short Term
Long Term
Geography
North America
United States
Canada
Rest of North America
Europe
Germany
United Kingdom
France
Spain
Rest of Europe
Asia-Pacific
India
China
Japan
South Korea
Rest of Asia-Pacific
Rest of the World
South America
Middle-East and Africa

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Car Rental Market Trends

This section covers the major market trends shaping the Car Rental Market according to our research experts:

Increasing Demand for Online Car Rental Services to Play Key role in the Market

Technology is a critical component expected to boost the market over the forecast period. Increased adoption of information technology is transforming the industry and enabling operators to deliver improved services to their customers. This includes the utilization of optimized corporate and customer information management and the development of convenient internet booking applications. For instance,

  • The order online or pick-up model is at the forefront of identifying applications for beacons and near-field communications (NFC). Newer players, like Zipcar and BlaBlaCar, are benefiting from using innovative business models such as car-sharing and adopting technologies such as telematics. Uber and Lyft are using mobile technologies and devices to better meet consumers’ personal transportation needs. These initiatives are contributing to the disruption of the car rental industry.

Currently, online booking also serves a variety of purposes, such as verification of documents of the renter, offering information to the renter regarding the car, services like drop and pick-up of the rented car at a certain place, e-signing contracts, and cashless transactions. Smartphone sales are another major factor propelling the market. The rising dependence of users on smartphones for carrying out a variety of activities traditionally done by personal computers has significantly helped transform the car rental experience for customers.

  • Rental companies such as Enterprise a Car, Europ Car, etc. are also strengthened their position in sector by expanding their operation of vehicle rental services in Spain tourist airport. Though key companies have strong presence in the country there are no latest developments or active strategies adopted by them so the van rental market in the country is witnessing slow demand. ​

This is further enhanced by the increased availability of comprehensive demand-oriented mobility solutions. Industry players such as Sixt SE, Uber, and Avis have launched their mobile apps through which customers can easily choose vehicles from a portfolio and carry out bookings.

Car Rental Market : Revenue Share (in %), by Booking Channel, 2021

North America Likely to Play Significant Role in the Development of Market

The North American region is expected to retain its dominance over the forecast period. The rising number of leisure and business trips across the region, both locally and internationally, is among the prominent factors influencing the growth of the regional market. Additionally, a continuous shift in consumer preference toward rental services and the presence of prominent service providers in the region like Avis Budget Group and Enterprise Rent-a-Car is expected to accelerate the revenue generation prospects.

Recently, the usage of these services increased in several cities, fueled by increased initiatives by service operators. For instance, Uber Technologies Inc. adopted mobile technologies and other devices to meet consumers’ personal transportation requirements more efficiently. With smartphone apps, rental services have entered a new realm of possibilities to facilitate this mode of short-term car rentals.

  •  Vehicles are collected and returned at several possible predetermined spaces for durations that are measured in blocks of 1 hour or 30 minutes. The entire transaction can even be completed on the phone without any human interaction. In addition to cars, Hertz has also made the model of car rentals available to commercial vehicles like good vans.​

This growth in revenue share can be primarily attributed to the increased usage of car rental services in the United States, the rising adoption of electric cars, and growing concerns and awareness of lower emissions among consumers in the region. 

  • In April 2022, SIXT, one of the leading global mobility providers, is continuing its rapid expansion across the US and announces the opening of new branches in Charlotte and Baltimore, offering customers more rental choices on the East Coast.
  • In May 2021, Uber has launched a new car rental service called Uber Rent in Washington DC, as well as announcing an expansion to its Uber Reserve option to some of the US’ biggest airports. As the announcement mentioned, the service is only launching in the US capital initially, though it is expected to be rolled out across the country later.
Car Rental Market - Growth Rate, by Region, (2022 - 2027)

Car Rental Market Competitor Analysis

The market is moderately consolidated, with numerous international and domestic companies operating across the world. However, the industry is on the verge of consolidation, with few players capturing a major market share. Key participants include Enterprise Rent-A-Car, The Hertz Corporation, Sixt SE, Europcar, and Avis Budget Group. The primary focus of these players is on enhancing their services to gain a customer base and maximize profitability. For instance, 

  • Sixt SE has launched a smartphone app allowing company car drivers to manage everything related to their contracts at the push of a button. From March 2021, the car rental firm Hertz introduced an annual membership fee for its 24/7 service that allows members contactless rental of cars and vans.

Collaboration is another key strategy implemented by industry players to strengthen their positions in the market. For instance, 

  • In May 2021, Uber launched a new car rental service called Uber Rent in partnership with the Dublin-based car rental company CarTrawler. The partnership will see CarTrawler run Uber's car rental technology, which is being rolled out across the United States.
  • In February 2021, Humax announced that it would supply the WTC Auto Rent RAiDEA mobility service platform to customers in the Middle East by improving technology for a round trip, free-floating, and one-way infrastructure specially designed for cars, including electric scooters, bikes, motorcycles, and cars.

Car Rental Market Top Players

  1. Avis Budget Group Inc.

  2. Sixt

  3. Hertz Corp.

  4. Enterprise Holdings Inc.

  5. Europcar Group

*Disclaimer: Major Players sorted in no particular order

Car Rental Market Concentration

Car Rental Market Recent Developments

  • In February 2022, In February 2022, UFODrive raised 19 million US dollars in its Series A funding round. The main investors are car rental company Hertz and the private equity firm Certares. Hertz plans to use UFODrive’s digital rental and fleet management technology to operate its global electric car fleet.​
  • In February 2022, Udrive, the UAE’s homegrown brand providing a pay-per-minute car rental service, completed another strong funding round with investments of USD 5 million from Cultiv8 and Oman Holding International. The investment will support Udrive for the upcoming expansion in the region and enhancements of its technology.​
  • In November 2021, Hertz rentals partnered with Tesla Motors to supply 100,000 Model 3S by 2022, and half of these vehicles are expected to be rented out to Uber drivers.
  • In April 2021, GoAir partnered with Eco Europcar and launched car rental services across 100 cities in India, including 25 airports. Through Eco Europcar, GoAirwill is offering Chauffeur-driven cars from mid to luxury car segments.
  • In February 2021, Theeb Rent a Car, a Saudi-based car rental firm, expanded its car rental fleet in the Kingdom. The company's expansion strategy is to modernize and develop its fleet to offer different car brands and models to its customers.

Car Rental Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION (Market Size in Value USD billion)

    1. 5.1 Booking

      1. 5.1.1 Offlne Access

      2. 5.1.2 Online Access

    2. 5.2 Application

      1. 5.2.1 Leisure/Tourism

      2. 5.2.2 Business

    3. 5.3 End User

      1. 5.3.1 Self-driven

      2. 5.3.2 Chauffeur-driven

    4. 5.4 Vehicle Type

      1. 5.4.1 Economy/Budget Cars

      2. 5.4.2 Luxury/Premium Cars

    5. 5.5 Rental Length

      1. 5.5.1 Short Term

      2. 5.5.2 Long Term

    6. 5.6 Geography

      1. 5.6.1 North America

        1. 5.6.1.1 United States

        2. 5.6.1.2 Canada

        3. 5.6.1.3 Rest of North America

      2. 5.6.2 Europe

        1. 5.6.2.1 Germany

        2. 5.6.2.2 United Kingdom

        3. 5.6.2.3 France

        4. 5.6.2.4 Spain

        5. 5.6.2.5 Rest of Europe

      3. 5.6.3 Asia-Pacific

        1. 5.6.3.1 India

        2. 5.6.3.2 China

        3. 5.6.3.3 Japan

        4. 5.6.3.4 South Korea

        5. 5.6.3.5 Rest of Asia-Pacific

      4. 5.6.4 Rest of the World

        1. 5.6.4.1 South America

        2. 5.6.4.2 Middle-East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles*

      1. 6.2.1 Avis Budget Group Inc.

      2. 6.2.2 Hertz Global Holdings Inc.

      3. 6.2.3 Enterprise Holdings Inc.

      4. 6.2.4 Sixt SE

      5. 6.2.5 Fast Rent a Car

      6. 6.2.6 Bettercar Rental

      7. 6.2.7 Europcar Mobility Group

      8. 6.2.8 Shenzhen Topone Car Rental Co. Ltd

      9. 6.2.9 China Auto Rental

      10. 6.2.10 TT Car Transit

      11. 6.2.11 Renault Eurodrive

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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Car Rental Market Research FAQs

The Car Rental Market is studied from 2018 - 2028.

The Car Rental Market is growing at a CAGR of >11% over the next 5 years.

The Car Rental Market is valued at 119 Billion USD in 2018.

The Car Rental Market is valued at 223 Billion USD in 2028.

Asia Pacific is growing at the highest CAGR over 2018 - 2028.

North America holds highest share in 2021.

Avis Budget Group Inc., Sixt, Hertz Corp., Enterprise Holdings Inc., Europcar Group are the major companies operating in Car Rental Market.

Car Rental Industry Reports

In-depth industry statistics and market share insights of the Car Rental sector for 2020, 2021, and 2022. The Car Rental research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Available to download is a free sample file of the Car Rental report PDF.

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