Asia-Pacific Car Rental Market Outlook, 2028

Asia-Pacific Car Rental Market Outlook, 2028

Car rental companies are businesses that rent out automobiles for a set period of time at a set price. Because of population growth, the car rental industry has undergone a dramatic transformation in recent years, becoming one of the most prominent sectors in fleet transportation. Consumers and manufacturers work together to create cost-effective rental schemes, such as leasing cars from their owners for three years and offering them for lease through an app-based booking system. Furthermore, car rentals are becoming increasingly popular as the most convenient and cost-effective mode of transportation. As a result of these benefits, the car rental market has the potential to grow at an exponential rate. Car rental businesses in emerging markets share characteristics such as unregulated, transactional, low margins, and operational efficiency. Zoomcar, Carzonrent, Myles, and Ola Rentals are among the online car rental companies that have gained significant traction in this space.

According to the research report, “Asia-Pacific Car Rental Market Outlook, 2028” published by Bonafide Research, the market is expected to grow at a 12.34% CAGR between 2023 and 2028, owing to increased travel and tourism as well as increased availability of high-end luxury and economy vehicles, particularly in developing countries in this region. Because consumers prefer to rent rather than buy, the region is expected to dominate the global market. The massive population of China and India, which account for more than 38% of the world's population, is a critical factor driving market growth in the region. The increasing number of billionaires in Asia Pacific can also be attributed to the growth. Exotic car rental is still a relatively new business category in the region when compared to Europe and North America; however, given the trends mentioned above, it is expected to grow significantly over the forecast period. Imported luxury cars costing more than USD 90,800 are becoming more popular in Japan among affluent individuals who are unable to travel outside of Japan due to the coronavirus outbreak but are willing to spend money.

Furthermore, rising consumer disposable incomes, continuously expanding economies, and rising business travel costs are expected to boost regional market growth. The Asia-Pacific car rental market is divided into five countries, which are China, Japan, India, Australia, and South Korea. China leads the pack with a market share of more than 47% in 2022. People are more likely to use car rental services as a result of government restrictions on car purchases in some areas of China, which are intended to address the country's growing traffic and pollution issues. Factors such as massive growth and expansion of the automobile industry, as well as a lower rate of car ownership, have resulted in an increase in market value. Furthermore, the growing trend of on-demand transportation services, combined with rising purchasing power, will provide the market with lucrative growth opportunities. Individuals do not have to be concerned about the high maintenance costs of these vehicles. However, low internet penetration in developing countries will limit the market's potential for growth. Furthermore, factors such as higher commissions charged by local rental companies and brand exposure will pose a significant challenge to market growth.

In addition to that, rising adoption of various car rental management software and rising pollution levels will provide the market with a variety of growth opportunities. The market is divided into several segments based on car type, including economy cars, executive cars, luxury cars, sport utility vehicles, and multi-utility vehicles. The economy car segment is expected to dominate the market in the coming years due to increased adoption of this car type. The market is expanding due to increased traffic congestion and the need to cut costs. Because parking for cars is expensive, not to mention additional variable costs such as insurance, fuel, and maintenance, the majority of the population in the region is increasingly turning to alternative solutions. The increasing adoption of subscription-based models for car rentals and sharing services is also driving market growth in the country during the forecast period. Kinto, for example, launched a three to seven-year vehicle subscription model in March 2019. Customers will benefit from lower down payments and other costs associated with car ownership. Furthermore, Ola Rentals, which launched in India in June 2016, provides a wide range of vehicles, from SUVs to hatchbacks. Ola Rentals' appealing and low-cost pricing makes it an excellent choice for users. As a result, these factors are expected to propel the regional Car Rental Market during the forecast period.

Emerging trends that have a direct impact on industry dynamics include increased adoption of electric vehicles and integration of IoT to provide value-added services such as booking, passenger safety, and assistance. Top players in the Asia-Pacific car rental market include eHi Car Service Limited, Zoomcar India Pvt. Ltd., Hertz Corporation, Carzonrent India Pvt. Ltd., and Divezy India Travels Pvt. Ltd., HYMAX, and DiDi China. The growing concern about traffic congestion, combined with the increasing number of automobiles on the road, is expected to drive growth in the luxury car rental market. The booming travel and tourism industry in many countries, as well as rising air pollution, will propel this market forward. People are increasingly opting for luxury car rentals rather than owning their vehicles due to rising traffic difficulties and their negative health consequences. Because these vehicles are chauffeured, there is no need to exert effort in driving them to their destination. They also have a number of advantages, such as cost-effectiveness, increased travel convenience, reduced traffic volume, and low air pollution.

Based on application type, the business segment dominated the market in 2022 with more than 50% market share and is expected to maintain this dominance in the future. Tourism, on the other hand, has grown rapidly over the decades, diversifying and becoming one of the region's fastest-growing economic sectors. Modern tourism is inextricably linked to development and includes an increasing number of new destinations. Tourism has become a key driver of socioeconomic progress as a result of these dynamics. Because tourism is such a large industry, the demand for car rentals is increasing throughout the region. To reduce the percentage of single-occupancy vehicles while touring, major car rental companies are forming strategic alliances with corporations, airlines, insurance companies, and universities. For instance, global car rental company Sixt SE is a trusted last-mile rental partner for many Asian Airlines such as China Airlines, Thai Airways, etc.

Recent Developments:
• Didi Chuxing partnered with BAIC in March 2020 to launch a car leasing service in China. However, this move has been criticised because ride hailing is consuming the country's automotive sales.
• Yamaha Motor Corporation invested USD 35 million in Indian car rental company Drivezy in February 2020, further strengthening the Indian mobility space.
• Air Asia India has partnered with Avis India to provide premium car rental services to airline passengers beginning in August 2020. This agreement allows Air Asia India passengers to use Avis services in 14 cities, including Noida, Delhi, Faridabad, Gurugram, Mumbai, Bengaluru, Chennai, Hyderabad, Chandigarh, Kolkata, Pune, Kochi, Jaipur, and Bhubaneswar.
• Toyota launched a car leasing service in India in August 2020, focusing on Bengaluru, Mumbai, and Delhi.
• Avis Budget Group recently announced the launch of a new all-in-one digital travel assistant. This product was developed in collaboration with Verizon and Edison Interactive. The product is only available to Avis, Payless Car Rental, and Budget customers.
• Europcar Mobility Group has announced a new strategic alliance with ECO Rent a Car in India. This collaboration is typically intended to benefit both ECO and Europcar customers. As a result of this collaboration, ECO customers will be able to book Europcar car rentals directly from the ECO website, as well as purchase all-inclusive packages outside of India via the Europcar Worldwide Network.

Major sites for Car Rental in Asia-Pacific: Airport Transfer Phuket, Automobil Leasing Pte Ltd, Avis Hong Kong, Bangkok Limousine, Car Rental Singapore, Carrental-india, Carzonrent, Chinacarservice, Hongkonglimousineservice, Limousine Express Group, Master Car Rental Co Ltd, Qingdao Car Service, Shenzhen Car Rentals, Singapore Car Rental, State Express, Thaitaxicab

Most Popular Airport for Rental Car Locations in Asia-Pacific: Beijing Airport, Tokyo Haneda Airport, Tokyo Narita Airport, Hong Kong Airport, Shanghai Airport, Dehli Airport, Seoul Incheon Airport, Seoul Gimpo Airport, Jakarta Airport, Changi Airport, Don Mueang Airport, Suvarnabhumi Airport, Kuala Lumpur Airport, KLIA2, Mactan Cebu Airport

Most Popular City for Rental Car Locations in Asia-Pacific: Bangkok, Manila, Phuket City, Kuala Lumpur, Tokyo, Tbilisi, Seoul, Chiang Mai, Jeju City, Yerevan, Incheon, Singapore, New Delhi, Denpasar, Baku, Cebu City, Colombo, Sapporo, Koh Samui, Bengaluru, Selangor, Changbaishan, Huangshan Mountains

Most popular car rental agents: Hertz, Europcar, Nippon Rent-A-Car, Times, Toyota Rent-A-Car, Avis, Nissan Rent-A-Car, Shouqi, National car, Sixt, keddy by Europcar, Budget

Most popular rental car models: Toyota Yaris (economy), Proton Persona (compact), Honda Civic (intermediate), Honda CR-V (SUV), Toyota Fortuner (4x4), Toyota Innova (7 seat)

Major Companies present in the market:
Avis Budget Group Inc, Hertz Global Holdings Inc, Enterprise Holdings Inc, Sixt SE, Europcar Mobility Group, Renault Eurodrive, Al-Futtaim Vehicle Rentals Company LLC, Carzonrent India Private Limited (CIPL), Eco Rent A Car, Uber Technologies, Inc, Budget Rent A Car System, Inc, Ola Cabs

Considered in this report
• Geography: Asia-Pacific
• Historic year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Aspects covered in this report
• Asia-Pacific Car Rental market with its value and forecast along with its segments
• Country-wise Car Rental market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Countries covered in the report:
• China
• Japan
• India
• Australia
• South Korea

By Car Type:
• Luxury car
• Executive car
• Economy car
• Sports utility vehicle (SUV) car
• Multi utility vehicle (MUV) car

By Application Type:
• Leisure/Tourism
• Business

The approach of the report:
This report consists of a combined approach of primary as well as secondary research. Initially, secondary research was used to get an understanding of the market and list out the companies that are present in the market. The secondary research consists of third-party sources such as press releases, and annual reports of companies, analyzing the government-generated reports and databases. After gathering the data from secondary sources primary research was conducted by making telephonic interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this we have started doing primary calls to consumers by equally segmenting consumers into regional aspects, tier aspects, age groups, and gender. Once we have primary data with us we started verifying the details obtained from secondary sources.

Intended audience
This report can be useful to industry consultants, manufacturers, suppliers, associations & organizations related to the Car Rental industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing & presentations, it will also increase competitive knowledge about the industry.