State of the Worldwide Car Rental Market, 2014
The global car rental market is continuing to grow and is predicted to continue to do so for the rest of 2014. The North American market is still the largest in the world closely followed by that of Europe. However, it is in the world’s developing economies that we have seen the largest revenue rise.
A Growing Market:
The worldwide car rental market is very closely aligned to international economic performance. With a number of major world economies now moving out of recession and economic growth beginning to pick up, the vehicle rental market is now more buoyant than it has been for over five years.
The world’s leading car rental brands are Hertz, Avis and Enterprise and, between them, they enjoy a market share well in excess of fifty per cent worldwide. Whilst these three American-based companies are well represented throughout the world, the brand leader in the European market is Europcar.
The car rental sector is reliant on two major customer streams: travel and tourism and the business travel and fleet sector. Other sectors, such as courtesy vehicles, occupy a smaller market share.
People who hire cars for travel and tourism tend to book them on the basis of a number of days, or sometimes weeks. Fleet hire, on the other hand, is usually for a longer contract period. Both these sectors are experiencing strong growth this year. One interesting trend noted in recent reports is that the off-airport sector is experiencing particularly strong growth.
One final aspect of the sector’s growth which is worthy of note is the exponential increase in online car rental bookings, which now accounts for the largest slice of total bookings made. The rapid spread in the use of tablet and smartphone technology is likely to stimulate a further increase in this type of booking.
Future Growth:
The major international growth, as reported by the leading car hire brands, is occurring in the world’s newer and rapidly expanding economies. Foremost amongst these are India and China, but other countries, such as South Korea, Indonesia, Brazil and Turkey are also performing well. This increase in the demand for rental cars is being driven by economic expansion, increased business demand and rapid improvements to the transport infrastructure.
Revenue growth is also benefitting from the widespread increase in private disposable income in these countries, which means that people have more money available to spend on leisure and travel. The growth of long-haul travel and the spread of tourism to once remote parts of the world seems likely to continue to make a direct contribution to the growth of the tourist car rental market.
Limiting Factors:
In addition to any future downturn in global economic growth, there are several other factors which could potentially limit the continued growth of the car rental market. These include the public’s increased awareness of the environmental impact of motor vehicles, which could lead to tighter emission controls.
The volatility of petroleum’s worldwide supply and its cost is another potential factor; if the overall costs of motoring increases, people are likely to be less willing to part with their money for leisure and tourism-related motoring, thus forcing down car rental revenues.
Written by Gatwick Car and Van Rental, the leading providers of vehicle hire services in Crawley and the surrounding areas.