- 8 November 2019 17:22
Car Rental Market Set to be Fastest Growing
Car rental is a service which provides car and automobiles on rent for short periods of time. This time period generally ranges from few hours to weeks. Car rental service is primarily located near airports, tourist places or city etc. There are many conditions on car rental service which may vary by specific country. The majority of car rental companies use a credit card to take additional fees or deposit amount before giving car on rent. Some companies request to carry identity documents while hiring car on rent.
The car rental market is primarily driven by rising tourism industry. Healthy economic growth and rising disposable income in developing countries are expected to propel the market growth during the year to come. Furthermore, high demand of the internet and smart technology helps to drive this market at the fast pace. However, some restraints like the rise in crude oil prices and lack of proper marketing may hinder the growth of the market. Moreover, use of the green vehicle is the most cost-effective way to improve energy efficiency and reduce carbon emissions is likely to open up new opportunities in evolving consumer preference.
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Increasing number of smartphone users globally and rising dependency on technology for carrying out activities such as booking and paying for rental services have been vital to market growth over the years. A number of vehicle rental companies are rolling out apps to notify their customers about promotional offers, discount coupons, fare, real-time tracking, and availability. As customers demand availability of cars in minimal time, industry players are focusing on enhancing their service convenience and streamlining business processes by utilizing IoT-enabled fleet management solutions.
The Global Car Rental Market Size is expected to reach over USD 187.5 billion by 2026 and is expected to grow at a CAGR of 13.7% during the forecast period, 2019–2026.
Industry participants compete with each other on the basis of fleet size, pricing, location flexibility, and marketing expertise. The market is highly competitive, forcing companies to shrink their profit margins in order to offer better services to customers than their competitors. High intensity of competition within the industry is also encouraging major players to acquire smaller companies in order to strengthen their position in the marketplace. Several prominent service providers have introduced their brands at affordable prices as a strategy to expand their customer base.
Further key findings from the report suggest:
- Along with reduction in fuel prices, there has been a considerable rise in number of international travelers worldwide, thereby resulting in rising demand for rental services
- Rising consumer awareness regarding rental add-ons and availability of affordable solutions is compelling car rental market players to focus on enhancing their services and prioritizing customers' convenience
- Airport transport is anticipated to emerge as the largest application segment over the coming years, owing to a significant increase in number of air travelers across the globe. Numerous small companies are also entering this segment with new technologies and processes, further propelling the revenue generation prospects of the segment
- Bleisure travel, which refers to a combination of a business and leisure trip, is one of the emerging and most promising trends in the travel and tourism industry. This trend is poised to propel the demand for car hiring and renting services among leisure and business travelers.
Global Car Rental Market is segmented by booking type, vehicle type, and application.
Based on the booking type, the car rental market is segmented into online access, and offline access. Online access holds the major share in the global market. Based on the vehicle type, the car rental market is segmented into economy/budget cars, luxury/premium car. Economy/budget cars dominate the global car rental market. On the basis of application, the car rental market is segmented into leisure/tourism and business. Leisure/tourism dominates the global car rental market. Leisure/tourism is the major way and application for the car rental which is the reason the market is expected to dominate.
Geographically, the car rental market has been segmented into North America, Europe, Asia Pacific, and Latin America and the Middle East & Africa (LAMEA).
North America dominates the global Car Rental market owing to the growing adoption of rental vehicles and increased investment in the tourism by countries such as the U.S. and Mexico are driving the market growth in North America. Europe accounts for the second leading share in the global car rental market. Increased number of car rentals in the developing countries such as Japan, Korea, and China are significantly driving the market growth. Moreover, rapid urbanization and growth in buying power have increased the demand for rental vehicles. Continuously increasing tourism activates in Asia Pacific region have supported the growth of the car rental market in Asia Pacific. On the other hand, LAMEA holds the least share in the global car rental market. Middle East holds the major share in the LAMEA market owing to the huge spending power of the people and continuously increasing tourism activities.
Some of the major players in the market are Avis Budget Group Inc., Eco Rent a Car, Enterprise Holdings Inc., Europcar Group, Car2go, Hertz Corp., Sixt, Movida, Ace Rent-a-car, Global Cars, Localiza–Rent-a-car SA, Advantage Rent-a-car, National Car Rental, Locamerica, and others.
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Market by Booking Type: Online Access, Offline Access
Market by Vehicle Type: Economy/Budget Cars, Luxury/Premium Car
Market by Application: Leisure/Tourism, Business
Market by Geography: North America, Europe, Asia-Pacific, Rest of the World