Pune, India, Feb. 04, 2022 (GLOBE NEWSWIRE) — According to the report, Car Rental Market size is projected to grow from USD 58.34 billion in 2020 to USD 144.21 billion in 2027 at a CAGR of 6.7% in the 2020-2027 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Increasing Population of Smartphone Users to Drive Growth
With the emergence of latest technologies, such as improved GPS tracking and high-speed internet, most players in the car rental market are offering smartphone-based applications to their customers. This strategy helps them effectively acquire new customers and retain old ones. The increasing usage of smartphones worldwide, coupled with their high penetration in developing countries owing to reducing prices is anticipated to drive the global car rental market growth.
For instance, according to a report published by the Indian Cellular and Electronics Association and KPMG, India will register around 820 million smartphone users by 2022. In addition, the increasing demand for car rentals from corporate travelers is projected to further strengthen the growth. However, increasing fuel prices and low penetration of alternative vehicles (such as EVs) may hinder the growth.
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Economy Cars Segment to Dominate the Global Market
Based on vehicle type, the economy cars segment dominated the global market with 37.18% share in 2019. The high competition among key players, which results in features, such as low price, high fuel efficiency, and better practicality, is the key factor driving the segment growth. Based on the application, the airport transport segment is set to grow exponentially, at a CAGR of 6.5% till 2027. The increasing number of airports in developing countries across the world is expected to drive the segment growth.
The COVID-19 pandemic has stymied economic activities, afflicting industries and businesses around the world. Lockdowns and social distancing have stoked fears about an imminent economic recession, and have, in the process, disrupted supply chain networks, pushing down demand for goods and services globally. Governments are taking several efforts to mitigate the damage caused by this pandemic, but uncertainty continues to be prevalent.
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Increasing Tourism in U.S. to Surge Demand in North America
North America is set to dominate the global car rental market share during the forecast period. The increasing demand for such cars for purposes, such as tourism and business trips in the U.S. is estimated to drive growth in the region. For instance, according to Statista, by 2021, the car rental segment in the U.S. will reach USD 18,223 million.
The market in Asia Pacific is estimated to showcase promising growth during the forecast timeline. Increasing disposable income in developing countries will increase the demand in the region. In addition, the emergence of new players offering car lease through smartphone-based apps is anticipated to drive growth in the region.
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Focus on Expansion Strategies to Aid Key Players Increase Product Portfolios
Key players operating in the market are focusing on expansion strategies such as mergers and acquisitions. This will help them eliminate competition, as well as expand their product portfolios. For instance, in September 2020, Localiza Rent a Car SA acquired Unidas, a Brazilian car rental company and a close rival of the latter for USD 2.18 billion. Under this acquisition, the company will acquire 76.9% stake in Unidas.
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Global Car Rental Market Segmentation:
By Vehicle Type:
- Luxury Cars,
- Executive Cars
- Economy Cars
By Application Type:
- Local Usage
- Airport Transport
By Rental Duration Type:
- North America (U.S. and Canada)
- Europe (U.K., Germany, France, Italy, Spain, Scandinavia, and Rest of Europe)
- Asia Pacific (Japan, China, India, Australia, Southeast Asia, and Rest of Asia Pacific)
- Latin America (Brazil, Mexico, and Rest of Latin America)
- Middle East & Africa (South Africa, GCC and Rest of Middle East & Africa)
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