Car Rental Market Size - By Booking Type (Online, Offline), By Rental Length (Short Term, Long Term), By Vehicle Type (Luxury Cars, Executive Cars, Economy Cars, SUVs, MUVs), By Application (Leisure/Tourism, Business), End User & Global Forecast, 2023 - 2032

Car Rental Market Size

Car Rental Market size was valued at USD 122.3 billion in 2022 and is estimated to register a CAGR of 7.4% between 2023 and 2032. The proliferation of online booking platforms and user-friendly mobile applications has enhanced convenience in the car rental sector. These digital tools help customers to effortlessly compare pricing, select preferred vehicles, and swiftly make reservations. Companies operating in the market are launching innovative applications to enhance the customer experience.
 

For instance, in May 2023, IndusGo, a self-drive car rental company, IndusGo launched its upgraded mobile app version ‘IndusGo 2.0’. The new app offers convenience, efficiency, and a user-friendly interface to help and empower users in easily renting a car.
 

The emergence of innovative mobility solutions including ride-sharing platforms and car sharing services has transformed the conventional car rental sector. To cater to the changing customer preferences, rental companies have upgraded their offerings, catering to those looking for short-term rentals or lacking personal vehicles. This adaptability widens their customer base while accommodating the growing trend of urban dwellers opting for alternative transportation options.
 

The availability of innovative transportation options, such as bike-sharing, scooter-sharing, and enhanced public transportation systems, is a challenge to the car rental market. These alternatives provide cost-effective & environmentally friendly choices for short-distance travel, particularly within urban environments. The convenience and accessibility of these solutions in combination with their suitability to reduce congestion & emissions, have increased the attention of modern commuters. As a result, traditional car rental companies must comply with the changing landscape of urban mobility and find ways to differentiate their offerings to remain relevant in an increasingly diversified transportation ecosystem.
 

COVID-19 Impact

The COVID-19 pandemic had an adverse impact on the car rental market. Travel restrictions, lockdowns, and reduced travel demand led to a sharp decline in rental bookings. Rental companies faced revenue loss, fleet management challenges, and reduced airport traffic. Health concerns and hygiene considerations further deterred customers. As travel gradually resumed, recovery remained gradual due to ongoing uncertainties and shifts in travel behaviors, underling the pandemic's influence on industry.
 

Car Rental Market Trends

Evolving from the sharing economy concept, Peer-to-Peer (P2P) car sharing has emerged as a major trend in the car rental industry. Enabled by digital platforms, individuals can rent out their vehicles to users, increasing the utility of privately owned cars. This trend has improved the rental fleet without the need for additional investments by rental companies. P2P car sharing offers vehicle owners an income stream and customers a wider array of vehicle options, transforming the way people access & utilize vehicles for various needs.
 

Car Rental Market Analysis

The short-term segment held over 72% of the car rental market share in 2022, propelled by the flexibility and convenience they offer. This approach allows individuals to secure a vehicle for precisely the duration they require, ranging from a few hours to a single day. This level of adaptability appeals particularly to those looking for a transportation solution that aligns with their immediate needs, eliminating the constraints of traditional long-term rental agreements. Short-term rentals cater to the modern on-the-go lifestyle, presenting a compelling alternative to permanent car ownership.
 

The economy cars segment accounted for 34% of the car rental market share in 2022, attributed to these vehicles’ features including affordability, fuel efficiency & ease of maneuverability making a good choice for both cost-conscious travelers and urban commuters. Moreover, their lower rental rates make them an attractive option for short-term rentals, business travelers, and leisure trips, increasing their appeal across a wide range of customers and strengthening their position within the vehicle type segment.
 

North America car rental market with a share of over 49% in 2022, due to the increase in tourism and business trips. As travelers embark on leisure getaways and corporate professionals attend meetings, conferences & site visits, the need for convenient & flexible transportation is necessary. Car rentals provide the ideal solution, catering to diverse traveler preferences and requirements.
 

Also, companies operating in the market are launching innovative car rental services in the U.S. For instance, in January 2023, Hertz, a car rental company started a public partnership, under which the company collaborated with cities in the U.S. to speed up the transition to battery electric vehicles using its own fleets and charging infrastructure. The company launched the program in Denver, Colorado.
 

Car Rental Market Share

Some of the major companies operating in the car rental market are:Advantage Rent-a-car:

•  Avis Budget Group
•  Sixt
•  Alamo Rent-a-Car LLC
•  Hertz
•  Enterprise Holdings Inc
•  Europcar
•  Uber Technologies Inc.
•  Localiza and Ola Cabs.

These companies are focused on strategic partnerships, new product launches, and commercialization efforts for market expansion. They are investing in research to introduce innovative products such as autonomous cars in service to garner the maximum market revenue.
 

Car Rental Industry News:

• In August 2023, Albatha Automotive Group, under its parent entity AGMC, entered into a strategic collaboration with Avis Budget Group. Through this partnership, the companies aim to expand their range of mobility services by incorporating the Budget Rent a Car along with Payless Car Rental brands. The recently established division within the Albatha Group will encompass the presence of both brands.
   
• In May 2023, Car Karlo Mobility Technologies, a company headquartered in Pune (India), introduced self-driven car rental offerings in the city. The company entered into the rapidly expanding Indian car rental sector by unveiling a user-friendly car rental booking site and a mobile app, streamlining the rental experience.
   

This car rental market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million) from 2018 to 2032, for the following segments:

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Market, By Booking Type

• Online
• Offline

Market, By Rental Length

• Short Term
• Long Term

Market, By Vehicle Type

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

Market, By Application

• Leisure/Tourism
• Business

Market, By End User

• Self-driven
• Chauffeur-driven

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • Australia & New Zealand
  • South Korea 
• Latin America
  • Brazil
  • Mexico
• MEA
  • UAE
  • Saudi Arabia
  • South Africa