Car Rental Business Market Size, Growth

Car Rental Business Market overview

The Car Rental Business Market size was valued at USD 79652.12 million in 2024 and is expected to reach USD 106463.61 million by 2033, growing at a CAGR of 3.2% from 2025 to 2033.

The car rental business market has evolved significantly due to increased travel frequency, urbanization, and the growing need for affordable mobility solutions. In 2023, over 48 million people globally used car rental services for business or leisure.

The industry operates on a wide spectrum—ranging from economy cars to high-end luxury vehicles—serving diverse user needs. With more than 1.3 million rental vehicles in circulation in the United States alone, the market has solidified its presence in airport hubs, urban cities, and tourism-heavy zones. In Europe, nearly 21% of total travel transportation for short trips is managed through rented vehicles, with Germany and France leading the trend.

Emerging economies like India and Brazil have also seen a 15% annual increase in local and app-based rentals. Notably, the penetration of electric vehicles (EVs) in the rental fleet has crossed 9% globally, indicating a clear push toward sustainability. Online booking channels now account for 72% of total rental bookings, reflecting the digital transformation of the car rental landscape.

Key Findings

DRIVER: Rising international and domestic travel frequency has directly boosted demand for flexible transportation.

COUNTRY/REGION: The United States leads in rental car fleets, with more than 2.3 million active units in circulation.

SEGMENT: Economy cars dominate the fleet composition, accounting for over 41% of total rentals globally.

Car Rental Business Market Trends

The car rental business market has seen several transformative trends that are reshaping its operational and strategic dynamics. One significant trend is the integration of electric and hybrid vehicles into rental fleets. As of 2024, more than 125,000 electric vehicles are part of global rental fleets, with companies such as Hertz committing to adding over 100,000 EVs by the end of the year. Another trend is the adoption of mobile-first platforms. Currently, 67% of all bookings are processed through mobile applications. In Asia-Pacific, mobile bookings surged by 21% in 2023 alone, largely due to the rise of app-based aggregators. Furthermore, contactless rentals using keyless entry systems and AI-driven vehicle assignment increased by 18% in North America and Europe. Subscription-based rental services have gained popularity among urban consumers, especially millennials. In 2023, around 1.4 million users globally opted for monthly car rental subscriptions instead of traditional leases. Also, the average rental duration has dropped from 6.2 days in 2018 to 4.9 days in 2023, indicating a preference for short-term convenience. Corporate rentals have grown substantially, with business-related rentals constituting 39% of total revenue-generating transactions. Fleet management systems are increasingly leveraging telematics and real-time diagnostics, with more than 58% of rental companies deploying GPS tracking and predictive maintenance technologies.

Car Rental Business Market Dynamics

The dynamics of the car rental business market are shaped by interrelated factors including rising travel demand, technology integration, environmental regulations, supply chain constraints, and shifting consumer preferences. In 2023, over 550 million car rental transactions occurred globally, reflecting a surge in short-term transportation needs for business, tourism, and last-mile mobility. This dynamic market thrives on the dual forces of convenience and flexibility, as consumers increasingly prioritize cost-efficiency and instant access to mobility services.

DRIVER

Rising demand for mobility solutions across urban centers and tourist destinations.

The global increase in domestic and international travel, coupled with urban congestion, has created a surge in demand for flexible, on-demand mobility options like rental vehicles. In 2023, over 1.6 billion leisure and business trips were recorded worldwide, contributing to over 550 million car rental transactions. Urban centers like New York, Tokyo, and London alone processed over 85 million car rental bookings combined. Furthermore, airports worldwide saw over 312 million car rentals initiated directly through airport-based rental counters, showing a continued preference for immediate transportation solutions upon arrival.

RESTRAINT

High maintenance and operational costs of managing large rental fleets.

Managing a rental fleet comes with significant overheads, including insurance, depreciation, servicing, and regulatory compliance. Average maintenance costs for a mid-sized fleet operator reached USD 1,850 per vehicle annually in 2023. Insurance premiums also spiked by 13% globally due to increased accident claims, especially in high-traffic regions. Moreover, companies operating in developing markets face additional regulatory bottlenecks such as road permits, emission regulations, and taxation, which further inflate operational costs. The complexity of fleet optimization and downtime management continues to challenge profitability, particularly for smaller regional operators.

OPPORTUNITY

Expansion of digital and app-based rental platforms.

The proliferation of digital channels offers substantial growth avenues. More than 72% of consumers used online platforms for car bookings in 2023, with 47% preferring mobile apps. In India, app-based car rentals grew by 31% year-over-year. Companies like Zoomcar and Revv added over 25,000 new users monthly during 2023. AI-driven platforms are also enhancing user experience by providing real-time vehicle tracking, personalized pricing, and automated billing. These technological advancements present opportunities to scale operations, penetrate new markets, and reduce manual overhead through automation.

CHALLENGE

Shortage of semiconductors affecting fleet availability.

The global semiconductor shortage has had a ripple effect across the automotive industry, limiting the supply of new vehicles. Fleet expansion for car rental firms was constrained in 2023, with vehicle procurement delays ranging from 3 to 8 months. For instance, the U.S. rental market saw a 9% drop in new fleet additions due to delayed deliveries from OEMs. As modern rental fleets increasingly depend on electronic systems, from GPS tracking to telematics, the chip shortage significantly hindered tech-enabled operations and vehicle inventory upgrades, especially during peak demand periods.

Car Rental Business Market Segmentation

The car rental business market is segmented by vehicle type and application. Vehicle types include Multi Utility Vehicles (MUVs), Sports Utility Vehicles (SUVs), Economy Cars, Executive Cars, and Luxury Cars. Applications are divided into On-airport Rentals and Off-airport Rentals. Each segment targets distinct consumer preferences based on affordability, luxury, and travel purpose.

By Type

Multi Utility Vehicles (MUVs): MUVs made up 14% of global car rental fleets in 2023, especially in regions with family or group travel demands. In Southeast Asia, over 1.2 million MUVs were rented for intercity travel and tours. MUVs offer superior luggage space and passenger comfort, making them ideal for longer trips and rural travel.
Sports Utility Vehicles (SUVs): SUVs held a 23% share in 2023, driven by rising consumer preference for comfort and off-road capabilities. In North America alone, SUV rentals reached 36 million units in 2023. The increasing availability of hybrid and electric SUVs has further enhanced their appeal in urban as well as adventure tourism markets.
Economy Cars: Economy cars dominate the rental market, accounting for over 41% of rentals globally. In Latin America, economy car rentals grew by 18% in 2023 due to price sensitivity and fuel efficiency. These vehicles typically cost 30% less per day compared to SUVs or executive cars, making them ideal for budget-conscious users.
Executive Cars: Executive cars accounted for 12% of rentals, particularly in corporate and intercity travel segments. In Europe, cities like Frankfurt and Zurich reported over 4.6 million executive car rentals, primarily for business use. These vehicles offer premium features without reaching luxury price points.
Luxury Cars: Luxury rentals represented 10% of the market, with over 6.8 million luxury vehicle bookings globally in 2023. Demand was highest in the UAE and U.S., with brands like BMW, Audi, and Mercedes topping the list. These rentals are often linked to premium travel, events, and special occasions.

By Application

On-airport Rentals: On-airport rentals accounted for 62% of global bookings in 2023. Airports like Heathrow (UK), JFK (US), and Changi (Singapore) alone processed more than 45 million rentals combined. Travelers prefer the convenience of immediate pickup upon arrival, making airport counters a dominant booking point.
Off-airport Rentals: Off-airport rentals contributed 38% to the overall market, mainly through digital platforms and city branches. In urban cities like Los Angeles and Mumbai, more than 17 million off-airport bookings were processed in 2023, catering to both locals and tourists preferring neighborhood or app-based pickups.

Regional Outlook for the Car Rental Business Market

The car rental business market exhibits varying regional trends, shaped by travel patterns, regulatory frameworks, digital infrastructure, and economic development. North America leads in terms of market size and fleet volume, with over 2.3 million rental vehicles in operation across the United States and Canada in 2023. This region saw more than 86 million bookings last year, with 74% conducted through mobile and online platforms, and over 60,000 electric vehicles integrated into fleets as part of sustainability commitments.

North America

North America leads the global car rental business with over 2.3 million active rental vehicles. In the U.S. alone, 86 million bookings were recorded in 2023. Canada reported a 12% increase in domestic rentals as tourism rebounded. The region is highly digitalized, with 74% of bookings made via apps or online portals. Integration of EVs into fleets has also been aggressive, with over 60,000 electric rental cars in operation.

Europe

Europe accounted for 29% of global car rental transactions in 2023. France, Germany, and the UK lead the region, contributing over 65 million bookings. Sustainability efforts are high, with 18% of fleets consisting of low-emission or electric vehicles. The European Union's clean mobility targets have pushed rental firms to modernize their fleets and adopt green technologies.

Asia-Pacific

Asia-Pacific is a rapidly growing market, recording over 110 million rental transactions in 2023. China, India, and Japan dominate the region, with app-based rentals growing at 28% annually. India alone saw 36 million car rentals last year. Affordable pricing, mobile penetration, and urban congestion drive growth in this region. Local players are expanding aggressively through franchise models and partnerships with tour operators.

Middle East & Africa

This region has emerged as a key tourism and luxury rental hub. The UAE, Saudi Arabia, and South Africa lead the region, with Dubai recording over 5.2 million rentals in 2023. Luxury car rentals accounted for 26% of total rentals in the UAE. The increasing number of events and exhibitions, such as Expo 2023 Doha, has boosted demand.

List of Top Car Rental Business Companies

Avis Budget Group
Enterprise Rent-A-Car
Europcar
The Hertz Corporation
Sixt
Localiza Rent a Car
Eco Rent A Car
Carzonrent India Private Limited (CIPL)
Al-Futtaim Vehicle Rentals Company

Avis Budget Group: Operates over 11,000 rental locations across 180+ countries, with a fleet exceeding 630,000 vehicles worldwide, including more than 15,000 electric vehicles integrated as of 2023.

Enterprise Rent-A-Car: Holds the largest rental fleet in North America with over 1.1 million vehicles. It operates across 90 countries and added more than 100,000 new vehicles in 2023, including 20,000 electric and hybrid units.

Investment Analysis and Opportunities

Investment in the car rental business has intensified across fleet modernization, digital platforms, and strategic alliances. In 2023, more than 7.3 billion USD was invested globally in new vehicle acquisitions, especially in EVs. Companies are shifting to low-emission fleets, with Hertz allocating 1.5 billion USD toward adding over 100,000 EVs by 2024. Digital transformation is another major area of investment. Over 62% of car rental firms invested in mobile apps, fleet tracking, AI-powered booking platforms, and CRM solutions in the past two years. In Asia-Pacific, Indian startups like Zoomcar and Drivezy raised over 120 million USD in venture funding to expand regional presence. Corporate tie-ups have opened new revenue channels. Enterprise secured over 300,000 long-term lease contracts with corporate clients in 2023. Additionally, airport authority partnerships have led to exclusive licensing agreements, with 190+ airports globally offering branded counters for just three major rental firms. Franchise expansion in emerging markets is another investment focus. Localiza expanded into Argentina and Chile with 400 new franchise outlets. Sixt increased its footprint in Asia with 60 new city offices. Market consolidation through mergers is also active. For instance, Europcar acquired Goldcar in 2023, boosting its fleet by 100,000 vehicles.

New Product Development

New product development in the car rental business market is being driven by a combination of digital innovation, sustainability goals, and customer demand for enhanced mobility experiences. One of the most notable areas of innovation is the integration of electric vehicles (EVs). In 2023, more than 125,000 electric vehicles were introduced into global rental fleets, up from 76,000 in 2022. Hertz, for instance, launched a partnership to add over 100,000 Tesla Model 3 units across the U.S. and Europe, with 65,000 already delivered by the end of Q1 2024. In addition to EVs, connected car technologies are being embedded into rental fleets at scale. Over 58% of new rental vehicles added in 2023 were equipped with telematics, predictive maintenance software, and real-time GPS tracking. These features not only enhance user experience but also allow fleet managers to optimize route planning, fuel efficiency, and servicing intervals. Keyless rental systems have become a standard in new product rollouts. Sixt, for example, expanded its Sixt Share product line with keyless entry functionality across 6 European countries. Customers can now unlock, drive, and return vehicles without human interaction—eliminating traditional rental counter delays. More than 1.8 million rentals in 2023 used keyless access features, a 42% increase compared to 2022.

Five Recent Developments

Hertz announced a deal with Tesla in 2023 to procure 100,000 Model 3 EVs, with 65,000 units already delivered by Q1 2024.
Avis launched AI-powered contactless rental kiosks in 300 U.S. airport locations in late 2023.
Enterprise introduced over 1,200 EVs in its UK fleet in early 2024, targeting zero-emission goals.
Sixt expanded to South Korea with 45 new rental stations in 2023.
Eco Rent A Car launched a premium chauffeur app in India, clocking 3.4 million downloads by Q2 2024.

Report Coverage of Car Rental Business Market

This report covers the full spectrum of the car rental business market, including fleet composition, operational models, consumer demographics, and regional performance. It delves into primary segments such as on-airport and off-airport rentals, with a thorough breakdown of vehicle types like SUVs, economy cars, and luxury sedans. The analysis extends to application-based usage, from business rentals to tourism-driven demand, supported by numerical insights across 30+ countries. The report explores market dynamics such as demand drivers, regulatory restraints, digitization, and post-pandemic recovery trends. It identifies major investment zones including fleet electrification, mobile platform development, and regional expansions. Key vendors are profiled in-depth, with emphasis on operational scale, digital innovations, and strategic roadmaps. Additionally, five recent developments illustrate ongoing market evolution between 2023 and 2024. Furthermore, the regional outlook captures performance metrics and forecasts for North America, Europe, Asia-Pacific, and the Middle East & Africa. Comprehensive segmentation analysis helps stakeholders assess growth potential by vehicle type and rental model. The study concludes with a forward-looking perspective on investment hotspots and product development initiatives shaping the next phase of global car rental services.