Global Self-Drive Car Rental Market: Sustainable and Economical
Self-drive car rental services allow customers to rent different types of cars for a specified duration of time without a chauffeur. These services are provided by several car rental companies to their customers by offering different types of cars on rent for different period of time depending on the user’s needs. The chart below depicts the size of the global self-drive car rental market from for the period 2019 and 2025. According to the Knowledge Sourcing Intelligence analysis, the global self-drive car rental market is projected to reach the market size of US$86.589 billion by the year 2025 from the current market size of US$59.280 billion in 2019.
Global Self-Drive Car Rental Market, Forecasts From 2019 to 2025, in US$ Billion
Source: Knowledge Sourcing Intelligence Estimates
With transportation becoming more and more important part of working population, the recent development of internet and technology has augmented the growth of self-drive car rental industry in many parts of the globe. Increasing number of people are appreciating the concept of self-drive car rental instead of purchasing a new vehicle on account of more convenience and comfort. People are increasingly attracted towards self-drive car rental services which allow them to choose and drive from a wide fleet of cars ranging from economy cars to super-luxury cars. This factor is significantly boosting the growth of self-drive car rental market worldwide. People are gradually inclined towards rented cars which they can drive on their own instead of opting for ride-hailing services and chauffeur driven services, thereby driving the global market growth.
Growing global travel and tourism industry is another factor that is boosting the demand for self-drive car rental services across different regions. Tourism sector is considered as one of the major contributors to the gross domestic product (GDP) in many countries of the world. According to the World Bank data, the number of international tourist arrival surged from 1.013 billion in 2011 to 1.442 billion in 2018.
International Tourists Arrival to the U.S., by Country, 2014-2018 (in Millions)
Source: U.S. Department of Commerce, International Trade Administration (ITA)
Increasing purchasing power and living standards in both developed and developing economies has increased the spending on vacations and short trips by people. Moreover, hectic work life has further increased the number of people who take short trips and vacations to rejuvenate their mind and body. As such, people are spending heavily to make their trips worthwhile. According to the International Trade Administration (ITA), nearly US$35 billion were spent by Chinese tourists on travel and tourism-related goods and services in the United States in 2017. People are increasingly taking up self-drive car rental services to drive and explore the new places while on vacations. With the advancement in technology, the pickup point can be chosen by customers according to their convenience. This factor will continue to support the self-drive car rental market growth with travellers pre-booking their choice of cars on various self-drive ca rental portals. Rising proliferation of smartphones and better internet connectivity is also contributing to the growth of the global self-drive car rental market.
Global Self-Drive Car Rental Market: Segment Overview
The global self-drive car rental market has been classified as vehicle type, mode of booking, and geography. On the basis of vehicle type, the global self-drive car rental market has been segmented into economy car and luxury car. By mode of booking, the segmentation of the global self-drive car rental market has been done as online and offline. Geographically, the global self-drive car rental market has been segmented into five major regional markets- North America, South America, Europe, Middle East and Africa (MEA), and Asia Pacific (APAC).
Luxury Car Segment Projected to Experience a Substantial Market Growth During the Forecast Period
By vehicle type, luxury car segment is poised to witness a noteworthy compound annual growth rate during the forecast period. This growth is primarily attributed to the fact that people are using self-drive car rental services to take a long drive of luxury car brands instead of buying one. The economy car segment accounted for a significant share in the global self-drive car rental market in 2019. The availability of economy car fleets is driving the growth of this segment during the forecast period. Consumers are opting for various economy cars to drive on rent owing to their economical rented prices as compared to that of luxury car fleet. Furthermore, self-drive car rental companies are also investing heavily to expand their fleet of economy cars in order to meet the growing demand across the globe. For example, Blue Bird Group announced to add 200 electric cars to its existing fleet in December 2019. This move was the part of the company’s strategy and commitment towards sustainable development.
Factors Hampering the Growth of the Global Self-Drive Car Rental Market
The growth of the global self-drive car rental market is expected to be hindered due to the availability of substitutes which include ride-hailing services, chauffeur-driven services, and easy availability of cheaper public transport. With the availability of these alternative car rental services along with public transport, some people are still reluctant to drive rented cars on their own, thus restraining the growth of the global self-drive car rental market to an extent. The ongoing pandemic caused due to COVID-19 outbreak globally has further reduced the demand for self-drive car rental due to severe impact on travel and tourism industry. Nationwide lockdowns and ban on the interstate as well as international travels has caused a drastic decline in the revenues across the global travel and tourism sector. With no tourists on these places, the demand for self-drive car rental has also affected to a large extent.
About the Author:
Dhiraj Kumar Sharma is a Market Research Analyst at Knowledge Sourcing Intelligence. He combines his outright understanding of technologies with years of experience working in the industry to deliver actionable information to clients who span across industries and geographies. Dhiraj often works closely with clients in order to better understand their requirements and is known for the quality of market insights he delivers to them.
