Car Rentals Market Trends
Category Intelligence on Car Rentals covers the following
- Information relating to market, supply, cost, and pricing analysis
- Hard to find data on cost and TCO models, supplier details, and performance benchmarks
- Macroeconomic and regional trends impacting cost, supply, and other market dynamics
- Category-specific negotiation and sourcing advice
Industry Outlook & Drivers
North America and Europe are high mature markets and contributes to more than 75 percent of the global car rental service’s revenue.
Growth Drivers and Constraints
Car rental services have benefited from business travellers, owing to their wide availability across countries and presence in airports. However,
COVID-19 has pushed the users to shift their preference towards private vehicles.
Porter’s Five Forces Analysis
Supplier Power
- The car rental industry has witnessed a huge drop in revenue, owing to COVID-19
- Suppliers are looking at ways to operate the business with minimal profits
- Supplier power has dropped, with global companies looking to offer discounts and coupons to increase rentals days
Barriers to new entrants
- A new entrant would have to make a high investment in resources, especially in technology, to ensure customer service is par with the industry
- Low profit margin, due to stiff competition in the industry, is another important dissuading factor for new entrants
Intensity of Rivalry
- The highly consolidated nature of the market combined with the similarity of service portfolios intensifies the rivalry in the market
- Car rental companies strive to overcome low differentiation by providing value-added services, like technological gadgets
Buyer Power
- Downtrend in adoption, low revenue and rental days has enabled better negotiation power to buyer
- The corporate buyers are looking to engage with car rental companies for monthly rentals at discounted rates
Threat of Substitutes
- Shared mobility is an alternative to renting a car, but the feasibility is low for long distance travel
- Adoption of technology, such as usage of video conferencing in the stead of travel, is also an alternative
- However, the threat of substitutes is low–moderate, fear among consumers is high due to the impact of the pandemic
