Princeton, NJ -- (SBWire) -- 05/28/2018 --In light of the strong competitive scenario in Europe, the Europe Vehicle Rental Market is expected to grow at a CAGR of around 6% during the forecast period. The market accounted for USD 14.8 billion in 2017.
Europe Vehicle Rental Market Dynamics
Companies in Europe have already risen close to USD 50 billion from IPOs (compared to around USD 32 billion in the U.S.) in 2016, with investors confident of the growth potential in the region. European cars are rented for a 24-hour period, usually with a 59-minute grace period. However, vehicles are most economical when rented for a week, or for a duration of more than five days with unlimited mileage.
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Drivers
Some of the factors driving the growth of the vehicle rental market in Europe are the rising number of foreign visitors in countries such as Germany and the United Kingdom. Increase in population, as well as resurging economic sentiment, is also helping the market register a healthy growth rate.
Restraints
As a consequence of the vehicle emission scandal of Volkswagen, the residual values of diesel vehicles (and not just Volkswagen Group vehicles) are bound to weaken to some extent in Europe. The vehicle rental companies would thereby face higher costs to finance their fleet purchases because of higher TCO (for other alternative vehicles) and these costs will either be passed on to consumers or simply erode profits. As a noted fact, Volkswagen constituted one of the major vehicle brands in the fleet portfolio of the vehicle rental service providers (especially for Europcar). Hence, the vehicle emission scandal has had a significant impact on the cost structure model of these companies.
Competitive Landscape
Europcar, a leading player in Europe's vehicle rental market, made a major move by launching a new brand – InterRent in 2013 and entering into a partnership with the US car rental provider, Advantage. The company also made a strategic acquisition of a majority stake in Ubeeqo, a French startup specializing in car sharing. The vehicle rental market in the region has undergone a lot of mergers and acquisitions, making the top 5 players contribute around 70% of the market. Most of the big-time US rental agencies have their presence in the market throughout Europe. These companies are among the most demanded ones in the region, due to their presence throughout Europe and readily available vehicles in nearly all the areas.
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Europe Vehicle Rental Market Segmentation
The market is segmented on the basis of booking type – offline access, mobile application, other online access; vehicle type- small and medium, premium and luxury, vans and trucks, buses, motorhomes and others; application purpose– leisure/tourism, business, and others; engine type- gasoline, electric vehicles, hybrid vehicles and others; end users- fleet operators, tour operators, governments; and country- Germany, Italy, Portugal, the UK, Spain, France and others.
Vehicles with manual transmissions are more easily available for rent than the automatic ones. Automatics are generally more expensive (usually by about 45%-55%) and are available only when there is a demand for a bigger, expensive vehicle (SUV). Among the vehicle types, compact cars are the more demanded vehicles compared to large SUV models, since maneuverability on the narrow, winding roads of Europe is an issue with these models. In addition, vehicle rental for the purpose of airport pickups generates more revenue in the European market than that for downtown trips.
The UK had the maximum share in the Europe vehicle rental market by the end of 2017. France is the second-largest market in the region, with increased demand for vehicles for leisure and tourism purposes. The market has evolved over the years to emerge as one of the most developed markets in the region. According to a press conference with CNPA, (the car rental branch of the trade association of cars and related activities in France), the number of car rental transactions increased by 9% in 2015, with further growth recorded in 2016-17. The market for car sharing in Germany has also shown a booming trend over the last 2 years and is further expected to continue growing during the forecast period. The sharing of operating and maintenance costs reduce the burden significantly among the consumers in a vehicle rental system and is one of the primary reasons for the growing inclination of the German market.
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Major players:
- AUTOLIV
- AVIS BUDGET
- EUROPCAR
- HERTZ GROUP
- PEUGEOT OPEN-EUROPE
Reasons to Purchase this Report:
- The report analyses how the economic scenario will affect the Europe vehicle rental market.
- Analyzing various perspectives of the market with the help of Porter's five forces analysis.
- Study on the product type that is expected to dominate the market.
- Study on the regions that are expected to witness fastest growth during the forecast period.
- Identify the latest developments, market shares and strategies employed by the major market players.
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