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
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
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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