Tuesday, July 27, 2021

Car Rental Market Is Expected To Grow Tremendously By 2024

According to TMR, the global car rental market is projected to witness an astonishing double digit CAGR of 14.40% during the forecast period that between 2014 and 2024. The opportunities in the market is projected to touch a valuation of US$290.07 bn by 2024.

Car Rental Market Thriving Due to Increased Travelling

The global car rental market is driven by the growing number of inbound and domestic travelers. The increasing number of air travelers is also positively impacting the growth of this market. Travelers across the globe are demanding high quality and reliable travel services for their tours. Leading car rental service providers are offering quality services and promoting their brands at airports and this is helping customers to adopt their services. Players in the market are concentrating on broadening their fleet size by including technical gadgets. Gadgets such as GPS and music systems are being used increasingly for profitability. This is expected to intensify the competition among players in the years to come.

Covid-19 Has Considerably Impacted Global Market

However, the fluctuation of oil price will restrict the growth of this market. The growing price of petrol and gasoline will affect the consumer spending level and this expected to act as a challenge. On a positive note however, the rise in GDP levels and increasing disposable income of consumers will have a positive influence on the market.

Over the last few months, Covid-19 pandemic posed several challenges for transportation and tourism due to stringent stay-at-home norms that were imposed by governments in several economies. The repercussions were felt in the high market volatility, which severely disrupted the tourism ecosystem—the backbone of car rental services the car rental market was affected by the pandemic on numerous counts, most notably loss of market share of top stakeholders. Notable companies who suffered are Hertz, Europcar, Uber, Lyft, and Avis. Nonetheless, as tourism is quick to respond to pandemic with health and safety protocols. Such initiatives by car rental rentals services are likely to inspire consumer confidence. Evidently, they are keen on making passengers safe against the novel Coronavirus virus. This will spur the growth of the car rental market.

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On the basis of category, the global car rental market is segmented into local usage, airport transport, and outstation. Of these, the airport transport segment is anticipated to contribute the most to the growth of the car rental market. The increase in the number of air travelers and increasing industrialization will push the growth of this segment in the years to come. The local usage segment will trail the airport transport segment. The high increase in the demand and adoption of cab sharing and car pool services will drive the car rental services for local usage.

Increasing Onus on Using Cutting Edge Technology

The penetration of information technology in the car rental industry has made car bookings and car reservations much simpler, reliable, easier, and safer and thus, customers are increasingly adopting these services. Stringent emissions standards by governments across countries will hamper the growth of this market. The increasing number of warnings by The International Energy Agency regarding the rising emissions of carbon dioxide will restrict the growth of this market in the years to come. International meetings and agreements are demanding mature economies and emerging nations to reduce carbon emissions. Thus, green movement has become a trend that is becoming popular. Leading companies are thus, adopting green car rentals.

The car rental market is also expected to see new horizon as tourism industry players gear toward adopting frameworks that will enable them manage disaster-related market shocks in a better way. Two factors will impede the pace at which this will be done undoubtedly. The cost-containment measures being adopted by worldwide tourism sector and still-lacking consumer confidence in some of the major economies. However, the car rental industry will emerge faster on the back of governments’ norms favoring tourism.

The competitive landscape of the car rental market is moderately fragmented in nature. This is mainly due to the presence of several international and domestic players in the market. The increasing dominance of giant players in the market is dragging the market towards consolidation, says Transparency Market Research (TMR).

The players in the market are primarily focusing towards enhancing their services so as to improve their customer base and gain profitability in the market. Along with this, players are focusing towards acquisitions and mergers, business expansion and innovation to strengthen their market share. Players are highly focused on improving the size of their fleet to cater to growing demand. The demand-supply gap is therefore providing good opportunities for players. Technology is also being used to improve consumer experience. These include use of GPS, advanced music systems, connecting devices, and so on. This is paving way for notable growth in the global car rental market over the forecast period. Some of the prominent players operating in the car rental market are Enterprise Rent-A-Car, Sixt SE, Europcar, The Hertz Corporation and Avis Budget Group.

The global car rental market is segmented based on:

Car Type

  • Luxury Cars
  • Executive Cars
  • Economy Cars
  • SUVs
  • MUVS

Category

  • Local Usage
  • Airport Transport
  • Outstation
  • Others

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