Dublin, Nov. 25, 2021 (GLOBE NEWSWIRE) -- The "India Car Rental Market - Forecasts from 2021 to 2026" report has been added to ResearchAndMarkets.com's offering.
The India car rental market is projected to grow at a CAGR of 9.83% to reach US$2.030 billion by 2026, from US$1.053 billion in 2019.
Car rental companies are businesses that rent automobiles for a specific period of time at a particular cost. The car rental industry has undergone a drastic transformation over the past few years due to population growth, becoming one of the most prominent sectors in fleet transportation.
Consumers and manufacturers arrange for different rental schemes that are cost-effective, like leasing cars for three years from their owners and offering them for lease through an app-based booking system. Further, as online car booking continues to grow, car rentals are becoming increasingly popular as the most convenient and economically friendly means of transportation. The car rental market is able to grow exponentially as a result of these advantages.
Car rental businesses in India are characterized by similar characteristics like unregulated, transactional, low margins, and operational efficiency. Several online car rental businesses have gained significant traction in this space, including Zoomcar, Carzonrent, Myles, and Ola Rentals. New entrants have an opportunity to build a strong vehicle/car rental start-up with specific use cases and vehicle categories.
Among the fastest-growing segments of the Indian transportation industry are car rental and leasing. In addition, the organized car rental and leasing market are still quite small when compared to the rest of the Indian car rental market. Independent market players acquire the remaining share which is typically limited to metro cities.
Additionally, the growth of foreign and domestic travelers in the country as well as the rise in the consumer base for the car rental industry due to rapid urbanization has contributed to the growth of the rental industry. India's poor public transport system and widespread smartphone penetration offer great potential to develop car-rental services. In recent decades there has been a strong correlation between GDP growth and that of the transport industry.
Compared to overall GDP growth, the road transport sector experienced an average annual growth of nearly 8.8 percent during the last decade, exceeding the overall GDP growth of 7.6 percent. On top of all of this, the Indian government itself has taken steps to systemically lower private vehicle ownership. Taxes on the ownership of private cars or restrictions on the distribution of licenses are examples.
GROWTH FACTORS:
Increase in Millennials population:
Millennials, who are becoming the largest demographic in the country, are primarily responsible for the growth. The average age of the Indian population is below 30, and young adults prefer to rent a car to drive intercity for weekend getaways rather than own a car. The high cost of maintaining personnel vehicles has led to a lower rate of car ownership among millennials. Due to its cost-cutting and fuel-saving advantages, many people are drawn to car rental. As a result, the demand for car rentals in India has increased mainly for leisure and short trips.
Improved connectivity:
The highway network in India has increased from 1,32,500km It is a testament to India's improved pan-Indian connectivity. For driving enthusiasts to explore India's unexplored places, it is necessary to have easy and affordable access to rental cars. It is a term that would have barely been heard of even a couple of decades ago that is now emerging as a new recreational avenue for families.
Growth in tourism:
The government has been concentrating on improving the tourism sector in recent years. Budgetary funds allocated to the Ministry of Tourism for 2021-22 are Rs. 2026.77 Crores. Growing tourism budgets and thriving tourism activities have helped to propel rental car market growth. As compared to traveling on tour packages, most travelers now prefer to be able to see the world at their own schedule and pace, which is possible by renting car rentals.
Technological Advances:
Technological advances will increase market growth in the long run. Information technology has transformed the industry and enabled service providers to provide better products and services to their customers. This includes integrating customer information management with the development of convenient online booking applications.
RESTRAINTS:
Limited to urban areas:
In general, car rentals and ridesharing services require three parties to function - drivers, passengers, and service providers. Smartphones with internet connectivity are used to match riders with drivers, estimate and calculate fares, and process payments. In order for a driver to accurately locate the pickup or drop-off locations of customers, they must have a smartphone with GPS and an active internet connection. Not all regions in the country have the necessary technological development to support this.
COVID-19 on the India Car Rental Market
Restriction on travel: The global COVID-19 pandemic has devastated economies worldwide, hitting hospitality businesses, airlines, and transportation services particularly hard. A rapid spread of COVID-19 is affecting the travel and tourism industry as well as the car rental market simultaneously. Due to restrictions on travel around the world to contain the spread of the virus, demand for rental cars at airports has decreased as a result of reduced global air traffic.
Hesitancy for large investment: COVID-19 has revealed the necessity of using personal mobility rather than public transportation. The pandemic has also driven the economy down, making it less appealing for people to invest in cars. Renting a car comes in handy here. In lieu of the long-term expense of owning a car, shorter-term mobility options are preferred. Renting a car for personal use and for emergencies has increased significantly.
Company Profiles
- Zoomcar
- Ola
- Revv
- Myles
- Eco Rent a Car
- Avis
For more information about this report visit https://www.researchandmarkets.com/r/wjb9yp
