Europe Vehicle Rental Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

The European vehicle rental market was valued at over USD 12 billion in 2020, and it is expected to reach a value of over USD 20 billion by 2026, registering a CAGR of more than 11% during the forecast period.

Recent COVID-19 has disrupted the market growth. With lockdowns and travel restrictions, the demand for vehicle rentals has declined. As a result, from USD 16,894 million car rental revenue in 2019, the revenue declined to USD 8,072 million in 2020. This trend is seen in the commercial vehicle rental segment as well.

However, the European vehicle rental market is displaying a decent recovery post severe COVID-19 pandemic outbreaks in countries, such as Italy, France, United Kingdom, Spain, etc.

Some of the major factors driving the growth of the passenger car rental market are the growth in the tourism industry (resulting in an increase in the number of tourists visiting the region per month) and growing business opportunities in the region.

The rise in commercial activities in the European region and the increasing logistics sector are expected to help the commercial vehicle market growth in Europe during the forecast period.

Short-term leasing is likely to continue to grow during the forecast period, as it helps European businesses meet the peaks and troughs of seasonal demand by providing suitable trucks for the job at short notice, without any penalties or commitments. This region has also seen an increase in online sales channels owing to increasing internet and smartphone penetration.

Scope of the Report

Vehicle rental agencies primarily serve people who require a temporary vehicle, for example, those who do not own their car, travelers who are out of town, or owners of damaged or destroyed vehicles who are awaiting repair or insurance compensation. In addition, with the increasing logistics sector and emerging new e-commerce companies, rentals serve as the best solution to reduce their initial investment into buying delivery vehicles.

The European vehicle rental market has been segmented by application type, booking type, rental length type, and geography. By application type, the market has been segmented into leisure/tourism and Business. By booking type, the market has been segmented into online and offline. By length type, the market has been segmented into short-term and long-term. By geography, the market has been segmented into Germany, the United Kingdom, France, Italy, Spain, and the Rest of Europe.

The report also covers the market size and forecast for the European vehicle rental market across the regions mentioned. For each segment, the market sizing has been done in terms of value (USD billion).

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Key Market Trends

Expansion Strategy by Existing Players is Driving the Market Growth

The European vehicle rental market is expected to exhibit a healthy growth rate due to increased business and educational tourism, especially in the central and eastern European regions. Additionally, the Eastern and Southern European countries are significantly spending on transport and business infrastructure development, which is attracting executives, investors, and professionals from across the world. This factor is driving the demand for car rental in the region.

Many market players are witnessing tie-ups with prominent airlines to provide vehicle rental services directly at the airport. For example, in January 2020, Ryanair partnered with Rentalcars.com and integrated the car rental platform across the airline to provide an increased number of car rental bookings.

In January 2020, WeShare announced its expansion plans in the 7 new cities across Europe. WeShare plans to provide a fleet of 8,400 electric vehicles across Prague, Hamburg, Madrid, Paris, Munich, and Budapest. WeShare is partnering with Skoda services in Prague and Budapest, while Volkswagen is expected to provide e-Golf1 and other vehicles in Germany, Spain, Italy, and France.

In December 2019, the Europcar Mobility Group subsidiary Ubeeqo recorded a 70% growth in users compared to the monthly average and a 60% increase in reservations compared to November 2019. The round trip model of Ubeeqo has helped boost the brand's active customer base by 53%. London, Paris, and Barcelona contributed the most to the growth of Ubeeqo. In June 2020, Ubeeqo restarted its vehicle renting operations in London by making its fleet of car club vehicles available.

A survey revealed that nearly 30% of Europeans may avoid public transport for travel. Since the lockdown has generated new enthusiasm for road trips, staycations, etc., the car rental market is expected to witness a healthy increase at both organized and locally-based unorganized rental networks.

The outbreak of the COVID-19 pandemic resulted in the negative growth of the already struggling automotive and vehicle rental industry. Moreover, the outbreak has resulted in lockdowns and shutdowns, thereby halting the demand in the vehicle rental business. However, the vehicle rental market is expected to witness decent growth during the forecast period owing to the resuming of car purchases by car rental companies.

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