Over the past few years, the car rental industry has been growing at a faster pace across the globe. The lack of route flexibility in public transit and the need for a greener environment has driven commuters to move on to rental vehicles. Besides, the growth of the tourism industry also fetches opportunities for car rental business on a global scale. Car rentals come handy for various purposes like local transit, outstation and airport transfers.

Here is a look at the scope for the car rental business in 2020 and beyond.

Global market value

The global car rental market which is valued to be 61,738 million USD in 2020 is expected to reach $67,463 USD with a CAGR of 3.0% by 2023. Car rentals are an economical option for commuters while curbing the use of owned vehicles. The increase in internet penetration also helps transport networking companies to expand their service boundaries and improve their customer base.

Scope for car rental businesses

North America is the leading market for car rental business with 29.98% of revenue generation in 2018 and about 43% of the market growth is projected to be achieved at this location by 2024. The factors driving growth in North America include lower fuel costs, increased tourist visits, low availability of public transit and increased demand for airport transfers. The sector is predicted to witness an even faster growth in the United States in particular, than the other regions.

Next to North America, the Asia-pacific region holds a promising scope for the car rental business. In fact, the APAC market value is predicted to hit 21.4 billion USD by 2024 with a CAGR of 6.2%. The factors driving growth in the Asia-pacific region include economic growth, rapid urbanization and an increase in international air travel.

China leads the Asia-pacific market with a share of 27%. China’s ride-hailing giant DiDi Chuxing has partnered with leading automakers to electrify its fleet as per market requirements. It is, of course, a sign of increased opportunities for transport networking companies in the country.

Similarly, European countries such as France, Spain, Italy and Germany make way for the car rental business chiefly with the growth of the tourism sector.

Want to know the key strategies to grow a new or existing car rental business in 2020? Stay tuned to TaxiMobility for the next part of the series.

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