Car Rental Market: Growing with Increasing Demand of Luxurious Lifestyle

Car rental is a popular service that helps in day today transport and commute. Car rental services provide cars on rent to customers for a payment. The car rental agencies offer a large selection of cars to customers at affordable rates.

Growth Drivers of the Industry

The car rental industry is witnessing a massive growth in recent years mostly because of the increase in the disposable income of consumers. These consumers who maintain a higher standard of living are most likely to spend more on luxury vehicles than the public transport. Moreover, the ventures involved in the car rental businesses are providing cars according to the demand of customers with enhanced advanced safety features at a relatively lesser expensive rate. Also, to maintain and fulfill all the requirements of high-performance cars, car rental companies such as Sixt SE, and Hertz Corporation have integrated their cars with smart digital solutions. These are the main influencing factors behind the growth of the market.

Impact of COVID-19 on the Industry

The global car rental market is predicted to witness a low growth rate during the outbreak of COVID-19 pandemic, owing to hard-hit to the tourism industry, extreme revenue losses, massive shutdown, and avoidance of social life. As per data published by the world tourism organization (UNWTO), global tourism could decline by 60-80% in 2020 mainly because of the Covid-19 outbreak, resulting in a revenue loss of $910 billion to $1.2 trillion. Furthermore, leading car rental companies such as Avis are imposing cost-saving measures that include a 20% reduction in its fleet along with a 70% reduction in its workforce.

However, several companies operating in the car rental industry such as Revv and Rent-a-car are coming forward with their strategic steps to help the society during the dark period. Other factors such as risk of viral infection while using public transport, restrictions on public transport are also fueling the demand for rental car companies.

Recent Trends Fueling the Industry Growth

As per a recent report by Research Dive , the leading players of the global car rental market include Enterprise Holdings Inc., Avis Budget Group, Europecar, SIXT SE, The Hertz Corporation., Carzonrent, Al-Futtaim., Eco Rent a Car., Bettercar Rental LLC, and Localiza.

These market players are focusing on developing unique strategies including mergers and acquisitions, product launches, existing technology upgradation, and collaborations and partnerships to sustain the market competition.

Some of the recent developments of the market are mentioned below:

• In August 2020, Air Asia India has teamed up with Avis India to provide premium car rental services to airline-passengers. According to this deal, Air Asia India travelers can utilize the services of Avis across 14 cities including Noida, Delhi, Faridabad, Gurugram, Mumbai, Bengaluru, Chennai, Hyderabad, Chandigarh, Kolkata, Pune, Kochi, Jaipur, and Bhubaneswar.
• In August 2020, Toyota has launched a car leasing service in India particularly in Bengaluru, Mumbai, and Delhi.
• In February 2019, another leading player SIXT SE has digitalized the car rental process in Europe. Also, the company has adopted connectivity technologies for its fleet management and has already connected thousands of vehicles through the IoT cloud platform. 
• In a recent press release, Avis Budget Group has announced the launch of a new all-in-one digital travel assistant. The company has launched this product in collaboration with Verizon and Edison Interactive. The product is exclusively available to the customers of Avis, Payless Car Rental and Budget.
• A latest news proclaims Europcar Mobility Group’s new strategic Alliance with ECO Rent a Car in India. This partnership is typically aimed at the benefit of both ECO and Europcar customers. As a result of this partnership, ECO customers will be able to access Europcar’s car rental services directly from ECO’s website and will be able to purchase all-inclusive packages outside of India through the Europcar Worldwide Network.

Conclusion

To sum up, the necessity of car rental services is never going to cease, so are the developmental strategies. The leading market players are emphasizing on the product development and other smart strategies so that the growth of the industry never stops.