Driving force: Revived domestic air travel will support modest industry growth for car rentals

The Car Rental industry has changed gears over the past five years, growing strongly after being forced into reverse during the recession. Given that air travelers represent the industry's primary market, growth in air travel over the past five years has been most important in driving revenue expansion. Moreover, the industry is anticipated to continue growing through 2021, driven by an increase in the number of air travelers, rising per capita income and rising corporate profit. The industry's largest companies are expected to retain their competitive advantages over smaller players, such as maintaining strategic alliances with airlines and hotels...read more.

Industry Statistics & Market Size
Annual Growth 12-17
Forecast Growth 17-22
What Our Customers Say

Industry Threats & Opportunities

  • Industry demand is anticipated to rise as domestic air travel increases, bolstered by the growth of the US economy
  • The industry faces growing competition from the emerging peer-to-peer car-sharing market
  • Large companies are expected to retain their competitive advantages over smaller players
  • Industry Report - Industry Investment Chapter

    The Car Rental industry is highly capital intensive, with the average industry operator expected to spend $3.24 on capital for every $1.00 spent on labor in 2017. To operate, industry operators must purchase a large fleet of vehicles. Operators must spend large amounts of capital on the maintenance and repair of their fleets, as well as regularly replace older and malfunctioning vehicles with newer ones. Consequently, depreciation represents the largest cost to many operators in the industry. The major players participate in a variety of vehicle purchase programs with major domestic and foreign vehicle manufacturers and wholesalers. Car rental companies purchase most of their vehicles through vehicle financing programs. Asset-backed debt facilities usually underwrite these programs. Res...purchase to read more.

    Additional Insights for the Car Rental Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Car Rental Industry are

  • Being part of a franchising chain
  • Access to niche markets
  • Establishment of brand names
  • IBISWorld analysts also discuss how external factors such as Domestic trips by US residents and Demand from taxi and limousine services in the Car Rental industry impact industry performance..

    shopping_cartPURCHASE OPTIONS

    What is the Car Rental Industry?

    Operators in this industry rent or lease passenger cars to customers. Car rentals typically last a short time (30 days or fewer) while leasing agreements last longer (12 months or more). The industry excludes the rental or leasing of cars with drivers or trucks.

    Industry Products
  • Leisure car rental
  • Business car rental
  • Car leasing
  • Car sharing
  • Industry Activities
  • Passenger car rental
  • Passenger car leasing
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Domestic trips by US residents
  • Demand from taxi and limousine services
  • Per capita disposable income
  • Inbound trips by non-US residents

  • Current Performance
  • Strong profit margins
  • Car-sharing drives industry innovation
  • Industry consolidation
  • Chart: Revenue Growth

  • Industry Outlook
  • Rising competition hinders profit margins
  • Consolidation to continue
  • Table: Car Rental Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Car Rental Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Life Insurance & Annuities
  • Car Body Shops
  • Consumers

  • Key Selling Industries
  • Auto Mechanics
  • Automobile Wholesaling
  • Car & Automobile Manufacturing
  • Car Body Shops
  • SUV & Light Truck Manufacturing

  • Products & Services
  • Leisure car rental
  • Business car rental
  • Car leasing
  • Car sharing
  • Chart: Car Rental Industry Products and Services Segmentation

  • Demand Determinants
  • The number of air travelers
  • Disposable income
  • Corporate profitability
  • Exchange rates

  • Major Markets
  • Airport customers
  • Car leasing
  • Off-airport customers
  • Car-sharing
  • Chart: Major Market Segmentation for the Car Rental Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Purchases
  • Depreciation
  • Wages
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Car Rental

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Car Rental Industry

  • Industry Globalization
    Enterprise Rent-A-Car CompanyAvis Budget Group Inc.Hertz Global Holdings Inc.
  • Table: Enterprise Rent-A-Car Company - financial performance
  • Table: Avis Budget Group Inc. - financial performance
  • Table: Hertz Global Holdings Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Car Rental Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Car Rental Industry
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • Domestic Trips by US Residents (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Airport Market
  • The market for car rental services at or near airports, which is made up almost entirely of air travelers and historically is the industry's primary market.
  • Car Sharing
  • A very short-term car rental where customers pay an annual fee plus hourly rental rate to rent cars from specified locations in participating cities.
  • Concession
  • An agreement between car rental companies and airports specifying how many counters a rental company can operate at an airport.
  • Off-Airport Market
  • The market for car rental services away from airports, usually in cities, suburbs or rural areas, which includes car sharing and insurance replacements.
  • Residual Value
  • A value car rental companies receive when they sell a rental car back to a car manufacturer or a car wholesaler.
  • Why buy this report?

    The Car Rental Industry Research Report measures market size, analyses current and future trends, and provides an indication of market share for the industry’s largest companies. IBISWorld’s collection of industry market research reports gives you insightful, up-to-date information on the supply chains, economic drivers, and key buyers and markets for hundreds of industries.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Car Rental:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Car Rental market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Car Rental, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

    Contact Us

    Want to speak to a representative? Call us.