Car Rental Industry Predicted To More Than Double In 10 Years
Rise in global markets key to prediction of $230 billion US by 2029
A U.K.-based industrial consulting firm is predicting that the car rental industry will more than double in size in the next decade and will be worth $230 billion U.S. by 2029. A reported issued earlier this week by Future Market Insights revealed that the expansion of the global industry, currently estimated at $116 billion, will be primarily due to rapid growth in east Asia, which will grab a majority of the market by the time the decade is through.
Currently, North America has the world’s biggest car rental market share, valued at $45.9 billion, which enjoyed an annual growth rate of 2.3 percent since 2015. However, the Future Market Insight model, projects steady annual increases in market size as high as seven percent.
The report attributes much of that growth to increased tourism numbers in China and Japan. Other factors the study took into account included more effort being put into economic and infrastructural development, medical tourism and foreign investments, almost of that activity taking place in China.
The study did not cite technology as a major contributor to industrial growth predicted over the next 10 years, although the reference to investment in infrastructure might imply some focus on innovation. Instead, regional demographics and consumer behavior seemed to dictate most of the projections.
While its results pointed to East Asia as an area where the greatest growth will take place, there was no indication on how its effect on North America would affect the status of the largest companies operating in the car rental industry. As of 2018, Enterprise Rent-A-Car, Hertz Global Holdings, Inc. and Avis Budget Group, Inc. still remain as major global players and hold nearly two-thirds of the U.S. market share.
That said, the study acknowledged that the North American market will still be prominent in the global industry, given that the bulk of its consumer base consists of commuters, corporate clients, tourists and car-sharing firms getting vehicles from car rental companies. Rentals at airports will dominate the field, but so will transactions via mobile apps, which will be one of the biggest drivers of industry growth.
As an example, the study cited the initiative by Enterprise Holdings, Inc. the world’s largest car rental company, to include multi-level monthly subscriptions as an consumer incentive to book a vehicle more frequently. It’s that ingenuity, suggested the report, that will see major players focus more on newer innovative options.