The global car rental market size is expected to reach USD 96.8 billion in 2024 and reach USD 155.89 billon by 2029, growing at a CAGR of 10.00% from 2024 to 2029.
Car rental is a service where consumers can rent out cars as per the consumer’s requirements and preferences. The rent is charged as per the vehicle selected and the time for which it is rented. The customers are mostly tourists and travelers. The only requirement to rent a car is to have a valid driving license. Along with renting out cars, car rental companies also earn from other sources like vehicle insurance. Slowly the whole business is shifting towards operating online.
The biggest driver for the growth of the car rental market is the growing demand for the tourism industry. People generally prefer renting out a car when visiting a new city for tourism or business purposes. This is prompting the growth rate of the market.
Nowadays, people tend to spend on nonessential products, which also include renting out a car. Thus, as the spending capacity of people increases, the growth rate of the car rental market also increases.
The growing prevalence of renting cars in emerging countries in India, China, and other emerging countries is diminishing the growth rate of the market.
In developing countries like India, the road infrastructure is improving every year, and road connectivity to remote places is also developing. This development also boosts the growth of the car rental market in every region of the country.
Therefore, the growth of the tourism industry, the development of infrastructure, and the changing approach of people toward the car rental market are the major factors driving the car rental market towards a steady growth rate.
Similarly, people’s interest in renting out a car is very less in underdeveloped countries as people prefer owning a car rather than renting it for a specific amount of time.
Competition from other transport facilities like online taxi booking services like Uber and Ola and the use of government public transport facilities is also hampering the growth of the car rental market.
Many people are still not aware of the car rental service. Lack of knowledge about using the service is also one of the reasons that the car rental service is not growing.
These are the major factors that limit the growth of the car rental market.
The increasing popularity of EVs (Electric Vehicles) can be a great opportunity for the car rental market. Car rental companies can provide electric vehicles for rent so as to attract younger consumers.
These can also act as a USP (Unique Selling Proposition) if a company does it.
Keeping in mind the customers’ ease of handling the operations, car rental companies can shift towards using technology. Using a mobile app can give a user a comfortable experience. This can attract more and more users to use the car rental service.
Now as the pandemic is over, so tourism industry is flourishing again. With the tourism industry, the car rental market can also grow as people tend to rent vehicles for the purpose of transportation at the location.
So, the car rental market has a lot of opportunities to grow in the near future.
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REPORT METRIC |
DETAILS |
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Market Size Available |
2023 to 2029 |
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Base Year |
2023 |
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Forecast Period |
2024 to 2029 |
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CAGR |
10.00% |
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Segments Covered |
By Type, Application, and Region. |
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Various Analyses Covered |
Global, Regional & Country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview of Investment Opportunities |
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Regions Covered |
North America, Europe, APAC, Latin America, Middle East & Africa |
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Market Leaders Profiled |
Avis Budget Group Inc., Sixt, Hertz Corp., Enterprise Holdings Inc., Europcar Group, and Others. |
The local transport segment is leading the car rental market as most people rent cars for carrying out day-to-day tasks like going to work or shopping. Users become regular customers of the specific vendor if he/she often use the car rental service and possibly can get personalized vehicle service.
The airport transportation segment is also rapidly growing as many people prefer to rent a vehicle straight from the airport rather than going for a taxi. As the number of people traveling by air increases, these segments of air transport in the car rental market will grow.
The outstation segment is growing at a much slower pace than the other two. It is mostly preferred by working professionals for business trips.
The economy cars segment is ruling the car rental market. They are popular in the market as they are fuel efficient, easy to use, and also, affordable. The people who need cars for short-term usage mostly use economy cars.
SUVs are also a popular option as they attract many different kinds of users.
Executive cars are preferred by people who want comfort as well as luxury and are mostly rented for special occasion use only.
Luxury cars are the least preferred type as they are out of reach economically for most people.
North America is the region that is leading in the car rental market. The United States is the region that is the biggest market. The rising prevalence of smartphones and the launch of various apps using the Internet of Things are major factors propelling the market demand in North America.
Europe is the second-largest car rental market share holder. Promoting hassle-free internet booking for cars in developed countries is accelerating the growth rate of the market.
Asia Pacific is gaining traction over the growth rate of the market during the forecast period.
Avis Budget Group Inc., Sixt, Hertz Corp., Enterprise Holdings Inc., Europe car Group. These are the main players that are dominating the global car rental market.
By Application:
By Type:
By Region
Frequently Asked Questions
The annual growth of the car rental market is 10.00%.
The economy cars segment is leading with the dominant shares of the market.
Avis Budget Group Inc., Sixt, Hertz Corp., Enterprise Holdings Inc., and Europcar Group are some key players in the market.
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