Europe Car Rental Market

Europe Car Rental Market Size (2024 to 2029)

The car rental market in Europe is growing at a brisk pace and is expected to showcase a CAGR of 13.1% from 2024 to 2029. The size of the European car rental market is predicted to be worth USD 15.2 billion in 2024 and USD 28.13 billion by 2029.

A car rental or car hire agency is a business that hires automobiles for a fee for brief periods. It is frequently set up with multiple local branches, generally situated close to airports or bustling city centers, and frequently accompanied by a website that enables online reservations.

The high vehicle costs and the increasing maintenance costs of the vehicles is the main factor boosting the growth of the European car rental market during the forecast period. Tourism is rapidly increasing in European countries. Also, car rentals are usually available at affordable costs. This generates a huge demand for car rentals in the region. Additionally, the easy booking to rent a car through online or walk-in booking services is further driving the growth of the car rental market in Europe. An Increasing preference for on-demand transportation Services and the availability of fewer parking spaces is accelerating the growth of the European car rental market during the forecast period. Furthermore, individuals with a huge disposable income usually prefer luxury cars, resulting in a high demand for luxury car rentals. 

High vehicle costs and maintenance costs of the vehicles is another key factor propelling the growth of the car rental market growth in Europe. Europeans spend, on average, USD 25,000 on new cars, yet costs differ greatly by nation because of several variables. The real cost of owning a car when purchasing one includes depreciation, taxes, insurance, maintenance, and regular gasoline expenditures, all of which are sometimes overlooked. In the most expensive EU nations, there is a direct association between high taxes and high overall costs. Norway has the highest cost of driving a patrol car, while Hungary has the lowest. European cars frequently come equipped with features that increase acceleration, speed, safety, entertainment, and passenger comfort to maximize their performance. But when there are more attachments, there are also more moving components and items that can need to be repaired or replaced. As a result, these vehicles need routine maintenance to keep them in working order and to avoid more significant and expensive repair costs. Hence, as cars in Europe are very expensive, most people cannot afford them and use rented cars for traveling. Hence, the high costs of vehicles and high maintenance costs of vehicles lead to the growth of the car rental market in Europe. 

The increasing crude oil costs result in the high prices of booking a rental car. This factor may hinder the growth of the European car rental market during the forecast period.

Impact of COVID-19 on the Europe Car Rental Market:

The COVID-19 pandemic has negatively impacted the Car rental market due to the lockdowns and travel restrictions worldwide. Tourism has decreased drastically during the pandemic due to travel restrictions across the globe. However, most of the destinations opened up in Europe after the pandemic phase, thereby accelerating the growth of the European car rental services market.

REPORT COVERAGE:

This research report on the European car rental market has been segmented and sub-segmented into the following categories.

Europe Car Rental Market - By Vehicle:

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

Based on vehicle type, the economy cars segment is expected to dominate during the forecast period. The majority of passengers prefer economy cars as they are convenient, fuel-efficient, and affordable. The economy cars are compact and comfortable enough for tourism purposes. Hence, these factors are accelerating the growth of the economy cars segment during the forecast period.

Europe Car Rental Market - By Application:

• Local Usage
• Outstation
• Airport Transport 
• Others

Based on application type, the airport transport segment is expected to hold a significant share during the forecast period. The increasing number of airports and the large number of people traveling to airports for tourism purposes are generating a need for car rentals in the region, leading to the airport transport segment's growth. 

Europe Car Rental Market - By Rental Duration:

• Short-Term 
• Long-Term

Based on the rental duration type, the short-term segment is expected to hold a significant share during the forecast period. The increasing number of car rental services in airports and local transportation is driving the growth of the short-term segment during the forecast period. 

Europe Car Rental Market - By Country:

• UK
• Russia
• Germany
• Italy
• France
• Spain
• Sweden 
• Denmark
• Poland
• Switzerland
• Netherlands
• Rest of Europe

The French car rental market is expected to grow at a significant CAGR during the forecast period due to the increasing number of tourists in the country. The increasing revenue in France has generally been attributed to a trend in domestic travel spending, which is primarily the result of an increase in foreign tourists.

The German car rental market is expected to grow at a noteworthy CAGR during the forecast period as Germany is the largest manufacturer of cars in Europe. Car rentals in Germany usually have cheaper rates than in other regions in Europe. Hence, the low cost of car rentals in Germany is driving the market growth rate during the forecast period.

KEY MARKET PLAYERS:

Avis Budget Group Inc., Enterprise Holdings Inc., Europcar International, The Hertz Corporation, Europcar Mobility Group, InterRent Car Rental, Peugeot Open-Europe, Localiza Rent a Car SA, SIXT SE, TOYOTA Rent a Car and Thrifty Car Rental Inc. are some of the noteworthy players in the Europe car rental market.

RECENT HAPPENINGS IN THE MARKET:

• In January 2022, SIXT partnered with a local taxi firm it Taxi, to provide on-demand taxi services in Rome through the SIXT app. The organization is advancing the internationalization of its mobility platform ONE by growing its network in Italy and refining its ride-hailing and transfer service offering SIXT Ride.
• In October 2021, Hertz signed a partnership with Carvana for a new direct-to-consumer sales channel for Hertz automobiles. Following its acquisition of KAR Global's physical auction division ADESA for $2.2 billion, Carvana, the digital remarketing portal for every individual, is being used by Hertz to operate thousands of vehicles.
• In December 2019, Avis Budget Group signed a partnership with Verizon and Edison and announced the debut of a new all-in-one digital travel assistant that would be available only to customers of Avis, Budget, and Payless Car Rental.