Luxury Car Rental Market to Exceed $22.5 Billion by 2022
The worldwide luxury car rental market is expected to exceed $22.5 billion, according to a Market Research Nest study released Feb. 7. That’s a phenomenal jump in the market’s value, considering the industry was worth some $10 billion in 2016.
Taking in reports from 12 of the biggest car rental players in the industry, regional activity (covering North American, Europe, China and Japan) and other rental elements that include business, leisure, airport and off-airport revenue streams, the report based the projected increase to a compounded annual growth rate (CAGR) of 20 per cent.
The study credits in part the ability to book a rental online and via smartphone apps as one of the main drivers for the projected increase. Much of this predicted activity is likely to be concentrated in North America, which is responsible for roughly half of the market followed by Europe, which comprises nearly 30 percent of the industry.
Despite the efficiencies of booking technology, which would presumably make it easier for smaller companies to compete in the marketplace, the Market Research Nest findings reveal that the industry will still be dominated by the big three companies. Enterprise, Hertz and Avis Budget will continue to collectively occupy a 74 percent share of the market.
The report projected a more optimistic picture than what was revealed in 2017. Back then, industry reported that a sluggish global economy slowed down impact luxury car rentals the past four years, at a CAGR of just over 14 percent.
Estimated growth of luxury car rentals is estimated to be higher than the vehicle rental industry overall, which at a CAGR of 11.6 percent is predicted to be at $164 billion by 2022 according to Allied Market Research. The study attributed overall growth to not only app booking as a factor, but new methods of leasing to simplify transactions as well. The report also underscored another growing influence: the speedy availability of green cars to environmentally-conscious consumers.
Adding to the growth patterns was the increase in disposable income of customers, particularly in Italy, Germany and the U.S. Developing road infrastructures in most of the top markets was cited as another incentive for those wanting to lease a vehicle.
Besides luxury cars, the Allied findings also used data from rentals of executive, economy, sports utility and multi-utility vehicles.
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