LONDON--(BUSINESS WIRE)--The car rental market in Europe is expected to grow at a CAGR of close to 18% during the period 2017-2021, according to a new market research study by Technavio.
The report presents a comprehensive outlook of the car rental market in Europe by rental type (airport transport, local transport, and outstation transport). The report also determines the geographic breakdown of the market in terms of detailed analysis and impact, which includes key geographies in Western Europe and Eastern Europe.
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Market driver: inbound tourists to Europe on the rise
The surge in international tourism will benefit the airport transportation segment of the car rental market in Europe in 2016. Demand from tourists will fuel the annual growth by 3%-4% in the leisure segment of the European car rental market during the forecast period. The top three car rental companies in Europe, namely Europcar, Hertz, and Avis Budget, will see a rise in their rate of car rentals owing to their vital presence in the top five European markets that include France, the UK, Germany, Spain, and Italy.
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Market trend: impact of telematics on car rental industry
The car rental industry is one of the most intensive industries, based on the number of vehicles. The industry is undergoing a change due to the implementation of telematics in rental car companies. The trend started in the US in 2015 and is expanding to Europe and Latin America, where the big players are analyzing telematics as a driving force to improve efficiency and productivity.
According to Sharan Raj, a lead analyst at Technavio for transportation and distribution research, “Telematics offers a wide range of optimization opportunities, achieving a positive ROI from the first month of service. There will be a relevant change in the car rental industry in the next five years due to telematics, thus increasing competitiveness, especially among rental car companies that have decided to embrace digitization through onboarding telematics.”
Market challenge: fluctuations in oil prices
Car rental companies are facing the problem of fluctuating fuel prices, which is forcing them to increase their charges. This is expected to become a constraint in the growth of the car rental market in Europe during the forecast period. Thus, the industry must take measures to cover the cost of higher fuel prices. The change in oil prices can increase be a threat to the growth of the car rental market in Europe. Hence, operators in the market are opting for alternative fuels such as CNG, LPG, biofuels, and propane to reduce costs.
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Key vendors in the market
- Avis Budget
- Enterprise
- Europcar
- Hertz
- Sixt
The car rental market in Europe has few global players and quite a few regional players. The competition at the regional level in developed nations of Europe is huge. It has been noted that large companies are buying out smaller companies to increase their presence or number of products, or to become technologically advanced. The competitive environment is set to intensify in the future, with increasing product extensions and technological innovations such as the application of robots in warehouses to pick and retrieve items.
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