Car Rental Market Size, Share & Growth 2024-2032

The car rental market is expected to experience significant growth, with a projected CAGR of 5.4% from 2024 to 2032. In 2023, the market attained a value of USD 104.03 billion, and by 2032, it is anticipated to reach approximately USD 166.61 billion. The market is being driven by the increasing demand for convenient travel options, a rise in tourism, and growing preferences for shared mobility. This blog explores the car rental market overview, market size, growth trends, forecast, and competitive analysis, along with frequently asked questions about the industry.

Car Rental Market Overview

The car rental market offers short-term vehicle rental services to customers, including individuals, businesses, and tourists. This market encompasses various vehicle types, including economy cars, luxury vehicles, SUVs, and even electric cars. Car rental services are primarily used for travel, leisure, and business purposes. As urbanisation increases and mobility needs evolve, car rental services are becoming a preferred option over car ownership, particularly in cities with high traffic and limited parking space. The rise of app-based platforms and the increase in global tourism also contribute to the market’s expansion.

Car Rental Market Size

The car rental market size was valued at USD 104.03 billion in 2023. This value reflects the growing demand for flexible and cost-effective transportation solutions, especially as more consumers opt for short-term rentals over long-term ownership. With significant market growth projected, the industry is set to benefit from increased demand in key sectors such as tourism, business travel, and local transportation. The market’s size is expected to reach approximately USD 166.61 billion by 2032, driven by these factors and a growing preference for shared mobility solutions.

Car Rental Market Trends

Several key trends are shaping the car rental market:

Shift Toward Electric and Hybrid Vehicles: With rising environmental concerns, consumers are increasingly opting for electric and hybrid vehicles. Car rental companies are expanding their fleets to include these eco-friendly options, catering to the growing demand for sustainable transportation.

Digital Transformation and Online Bookings: The shift to online and mobile-based booking platforms has made car rentals more accessible. Consumers can now easily browse, compare, and book vehicles from the comfort of their homes, improving the convenience factor.

Rise in Ride-Hailing Integration: Ride-hailing companies, like Uber, are partnering with car rental services to offer seamless transitions between ride-hailing and car rentals. This integration provides customers with more flexibility and convenience in their transportation options.

Corporate Travel Demand: The growing number of business travellers worldwide is a major driver of the market. Companies are increasingly opting for car rentals rather than owning company vehicles, as it provides greater flexibility and cost savings.

Expansion of Shared Mobility: Car rental services are adapting to the shared economy model, offering short-term rentals, car-sharing options, and flexible leasing arrangements, appealing to millennials and Gen Z consumers.

Car Rental Market Segmentation

Booking Type:
Offline Access
Online Access

Application Type:
Leisure/Tourism
Business

Vehicle Type:
Luxury/Premium Cars
Economy/Budget Cars
SUVs
MUVs (Multi Utility Vehicles)

Region:
North America
Europe
Asia-Pacific
Latin America
Middle East Africa

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Car Rental Market Growth

The car rental market growth is influenced by a variety of factors:

Increasing Tourism: As global tourism continues to rebound, especially after the pandemic, the demand for car rental services is surging. Tourists are looking for convenient and flexible transportation options during their travels.

Rising Consumer Preferences for Mobility Solutions: The convenience of accessing cars through mobile apps and online platforms has made car rentals an attractive alternative to ownership. Consumers are increasingly choosing rentals for short trips, leisure, and business purposes.

Growth in Corporate and Business Travel: Business travel remains a key driver for the market, with companies opting for car rental services instead of maintaining fleets of vehicles. This trend is expected to continue, particularly as global business activities expand.

Environmental Awareness: Consumers are becoming more eco-conscious and are actively seeking environmentally friendly travel options, including electric and hybrid car rentals.

Car Rental Market Forecast

The car rental market forecast indicates a steady and positive growth trajectory, with the market expected to expand at a CAGR of 5.4% from 2024 to 2032. By 2032, the market is projected to reach USD 166.61 billion, driven by:

• The expansion of shared mobility models, where more consumers opt for rental and sharing services instead of car ownership.
• The increased integration of ride-hailing and car rental services, making it easier for customers to use both services interchangeably.
• The growing adoption of eco-friendly vehicles, as both customers and companies are looking for greener transportation options.
• The rise of digital booking platforms that provide enhanced convenience and accessibility to customers, further boosting demand.

Competitor Analysis

The Hertz Corporation: A global leader in car rentals, Hertz offers a wide range of vehicles for both leisure and business needs. The company has been expanding its fleet with electric vehicles and providing a seamless digital experience through its mobile app.

Avis Budget Group, Inc.: Avis Budget Group is one of the largest car rental providers, known for its extensive fleet of vehicles and strong presence in the leisure and corporate travel sectors. It has focused on sustainability initiatives, including offering electric and hybrid cars.

Enterprise Holdings, Inc.: A major player in the car rental space, Enterprise operates brands such as Enterprise Rent-A-Car, Alamo, and National Car Rental. The company has a strong customer base, particularly in the corporate and business travel segments.

Uber Technologies Inc.: Known primarily for its ride-hailing services, Uber has ventured into the car rental space, providing customers with the option to rent cars through its app, further integrating mobility solutions for users.

Others: The market also includes various regional and smaller players, each offering unique services or catering to niche customer segments, such as luxury car rentals or eco-friendly vehicle options.