Summary of our market study

The French short-term car rental market is valued at between 5 and 6 billion euros.

The short-term car rental (LCD) market has experienced major disruption due to the COVID-19 pandemic, and leading companies such as Europcar and Hertz have filed for bankruptcy in the USA.

The global market, valued at over 110 billion USD.

After a sharp drop in activity in 2020, the market resumed growth in 2021.

The market is driven by the increase in tourism (200 million annual arrivals in France), the popularity of car-sharing with 463,000 unique users at the start of 2023.

The French short-term vehicle rental (S.T.V.R.) market is being driven by strong growth in the tourism sector, the development of short-term rental as an alternative to car ownership, and the emergence of the S.T.V.R. market.as an alternative to car ownership for users in major cities, the development of digital platforms and the expansion of new mobility models.

The number of transactions exceeds 8 million.

Carsharing, which includes various segments such as peer-to-peer platforms and city-financed carsharing, has gained in popularity, with unique users reaching the 460,000 mark per year.

Sector players

  • Stellantis has a significant presence in the car rental sector
  • Avis Budget Groupe
  • Hertz
  • Europcar
  • Sixt: German multinational
  • Ucar**: a niche player in the sector, Ucar has carved out a place for itself in the market by offering competitive services that emphasize accessibility and practicality.
  • Ouicar brings together individuals who wish to rent their own vehicle and those who need a car.
  • Enterprise Holdings includes Enterprise Rent-A-Car, National Car Rental and Alamo Rent A Car
  • Free2move: a member of the Stellantis group and a car-sharing specialist
  • Ubeeqo belongs to Eurpcar and specializes in car-sharing
  • Citiz offers car-sharing solutions in many French cities
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Summary and extracts

1 Market overview

1.1 Definition and scope of study

Short-term car rental (LCD), or vehicle rental, is a service offered by a company providing customers with vehicle rentals for short periods ranging from a few hours to a few weeks. Rental companies are often made up of a number of local branches, enabling customers to return their vehicle at a different location from the one at which it was picked up.

Most rental agencies are located in airport terminals, in the immediate vicinity of railway stations and in city centers, and reservations can be made online via a website. The car rental market therefore covers all transactions between companies and individuals enabling the borrowing of a vehicle over a given period. A distinction is usually made between short-term rentals and long-term rentals or leasing, where the lessor is the lessor.

Short-term rental vehicles can be used for a variety of purposes and by a variety of people, including :

  • Private individuals
  • Tourists
  • Corporate customers

In 2019, there were almost 8 million short-term vehicle rentals. The combination of several phenomena - sustained growth in tourism activities, the emergence of short-term rental as an alternative to vehicle ownershipthe combination of sustained growth in the tourist industry, the emergence of short-term rental as an alternative to vehicle ownership, and changes in motorist behavior, with drivers more inclined to adopt new forms of mobility, are all contributing to the structural growth of the LCD market in France.

The COVID-19 crisis turned the market upside down. The various measures to restrict and limit travel had a direct impact on the short-term vehicle rental sector. As a result, the sector's flagship companies, Europcar and Hertz, have been filing for bankruptcy in the United States since 2020, due to their financial difficulties. However, the upturn in tourism and the lifting of health restrictions in Europe, particularly in France, point to a strong recovery in activity in 2021, with sharp price rises in the most popular regions.

Indeed, on the global market, car rental sales are expected to grow at a compound annual growth rate of 8.7% between 2024 and 2034. The French market, meanwhile, saw a 64% increase in sales between 2015 and 2023. This is due to a number of factors, not least the steady increase in the number of trips to mainland France and the French overseas departments following the COVID-19 crisis.

Car-sharing is also experiencing considerable growth. Indeed, the number of carsharing users is growing rapidly, increasing by 42% between 2022 and 2023. This growth can be attributed mainly to the fact that over 80% of French people find car-sharing cheaper than buying their own car, and avoid the problems of parking and vehicle maintenance.

1.2 A fast-growing global market

The global short-term car rental market was booming before the **** pandemic. Indeed, changing motoring habits, particularly in developed countries, and the proliferation of short-term rental solutions have, among other things, driven up demand in the global market.

The global car rental market was estimated at ***.** billion USD in ****, according to a report published by Precedence Research. The market was expected to reach a global value of ***.** billion USD by ****, growing at a CAGR of *.*% over the coming decade.

The global car rental market World, **** - *****, in $ billions Source: ****

The United States leads this market, with around **% of global sales. Within this market, carsharing is the fastest-growing segment in recent years, with a market size of almost three billion dollars in ****[***].

1.3 The French market

INSEE compiles sales figures for companies operating under NAF code ****A: "Short-term rental of cars and light motor vehicles". The short-term car rental market has been booming in recent years, as can be seen from the graph below. In fact, there has been a real surge in activity, which can be explained by a number of factors: the proliferation of start-ups specializing in short-term car rental (***), the changing relationship between the French and their cars, etc. The drop in business in **** and the difficult recovery in **** can be explained in particular by the pandemic and the economic factors that followed.

Sales of short-term car rental specialists France, **** - ***** Source: ****

Below is a graph showing sales trends in the short-term car rental sector:

Sales of short-term rental of cars and light motor vehicles France, **** - ****, in billions of euros Source: ****

The size of the LCD market grew steadily until ****, when traffic was largely halted. In ****, the sector managed to pick up again, and in **** market sales far exceeded those of ****, reaching *.** billion euros.

1.4 The effects of the pandemic

As published in the French newspaper Les Echos, the negative impact of the health crisis continues to weigh on the French economy, and therefore on the short-term car rental market. The gloomy context is penalizing the activity of car rental companies, which have suffered from the stoppage of air traffic, the slowdown in rail and sea traffic, the rise in telecommuting, etc.

After a first-half drop in business, which reached **% in April according to the Conseil national des professions de l'automobile (***), car rental companies were hoping to recover thanks to the summer period, which accounts for a large proportion of sales and determines the sector's level of profitability. According to the CNPA, the drop in business stabilized at an average of **% over the summer. As can be seen from the graph above, the year **** saw a significant drop in business, with a sharp decline of almost **% over the year. Even so, French customers, who preferred to take their vacations in France, were out in force. But this was not enough to compensate for the near-disappearance of foreign tourists, and the persistent lack of interest from business customers. The reconfiguration of the autumn season and uncertainties about the future do not, for ...

2 Demand analysis

2.1 Typology of demand

The short-term rental market meets the needs of a variety of customers who use rental vehicles for a variety of purposes:

2.2 Target customer analysis

The target clientele for short-term car rental is heterogeneous. And in terms of demographics, considering the example of Europcar, considered to be the leader in the sector, we can see that the age group most likely to use short-term car rental is between ** and **.

Demographic breakdown of Europcar customers World, ****, in % Source: ****

It is interesting to note that the ** - ** age group is in the minority, representing only *% of Europcar's customer base. This can be explained by the fact that most rental companies have a policy of increasing prices according to the age of the driver: additional charges are applied for drivers under ** [***].

2.3 Cyclical demand and changing booking times due to the importance of tourism

A quick analysis of the keyword "car rental" typed into Google illustrates this fact (***): search for rental cars climbs in the summer period, generally around July, and bottoms out towards the end of the year.

Evolution of interest in the "car rental" search on Google France, ****-****

N.B.: the graph above represents the proportion of searches for a given keyword in a specific region and for a specific period, compared with the time when the rate of use of that keyword was highest (***). A value of * means that there is insufficient data for this keyword.

The cyclicality of the short-term rental market can be explained by several factors. Indeed, one of the most important determinants of demand in this market is LCD cars for tourism purposes. Naturally, the summer period is the busiest for tourists in France.

Foreign tourist arrivals in France France, **** - ****, in million arrivals Source: ****

As the world's leading tourist destination, France welcomes hundreds of millions of tourists every year, which has a significant influence on the vehicle LCD market. By ****, the number of destination trips to France has exceeded its pre-pandemic level, with ***.* million arrivals.

2.4 The popularity of carsharing

Carsharing is a catch-all term for several major segments:

CtoC platforms, such as the Drivy application, which bring together private individuals willing to rent out their personal cars to others; City-financed car-sharing, which is limited to a certain geographical perimeter, and is available to users on a subscription basis or as a one-off offer (***). Among these different operating modes: Loop carsharing, when the vehicle is returned to its starting station; Direct track" carsharing, with or without a station; Free-floating carsharing, where the vehicle is returned anywhere within a defined perimeter.

Carsharing has been gaining in popularity in recent years. The number of unique users is growing rapidly, reaching ***,*** at the beginning of ****.

Growth in the number of unique carsharing users France, **** - ****, in thousands of users Source: ****

The industry is taking shape, driven by the public's desire to promote this less polluting mode of transport, as well as by the new mobility trends of the French, who favor soft mobility or car-sharing over the private car, particularly in large cities. Proof of the market's new maturity, the main players in the sector (***) in ****. [***]

Car-sharing customers

Car-sharing services are aimed at a very specific clientele: the majority are urban, university-educated and employed. ...

2.4 Business car rental, a key demand driver

Car rentals for business travel are an important demand driver. Indeed, companies often resort to short-term private car rentals to meet their business travel requirements. The business travel market is highly dynamic, and is expected to recover rapidly from the economic downturn caused by the pandemic.

Business travel market trends France, **** - ****, in billions of dollars Source: ****

Until ****, the market was following a sustained growth dynamic, which was interrupted by Covid-**. But the sector has finally surpassed its **** level, with sales of $**.* billion in ****.

Annual variations in the size of the business travel market France, **** - ****, in % Source: ****

The business travel market has experienced significant growth post covid. Indeed, by ****, sales have more than doubled, with an annual growth rate of ***%. This positive trend, although much weaker, continues in **** with a growth rate of *%.

2.6 French preferences

The French's favorite short-term rental brands are relatively evenly distributed, with some brands slightly dominating. Europcar stands out as the most popular, with **.*% of users choosing it for their mobility needs. It is closely followed by Hertz, with **% of preferences. Avis comes third with **.*%, reflecting strong consumer confidence. Rent A Car and Sixt complete the ranking with **.*% and **.*% respectively, demonstrating a strong market presence despite fierce competition.

Share of French people who like the LCD vehicle brands mentioned France, February ****, in Source: ****

French people's preferences for short-term vehicle rentals vary according to age. Among **-** year-olds, Hertz is the most popular brand with **.*% of preferences, followed by Sixt at **% and Europcar at **.*%. Avis and Rent A Car are less popular in this age group, with **.*% and **% respectively.

By contrast, in the **-** age group, Europcar comes out on top with **%, closely followed by Hertz and Rent A Car. Avis comes fourth with **.*%, while Sixt is much less popular with this age group, with just **.*%.

Share of French people aged ** - ** who like the vehicle LCD brands mentioned France, February ****, in % Source: ****

Percentage of French people aged ** - ** who like the vehicle LCD brands cited France, February ****, in % Source: ****

3 Market structure

3.1 Market concentration and competition

on a European scale, the market is highly concentrated. Europcar, a long-standing market player, is the market leader, controlling almost **% of market share across Europe. The company is followed by traditional players Sixt (***).

Breakdown of market share in the LCD market Europe, ****, in Source: ****

The pandemic has added to the financial difficulties faced by these aforementioned players. The industry's growth has not translated into improved profitability, even in the run-up to the pandemic. Using the EBITDA of this panel of companies as an indicator of operating profitability, and looking at the sector's margin levels, it is possible to see that the sector's financial performance has declined between **** and ****, both in absolute terms and in terms of margin. The margin levels shown below explain why the sector has been particularly sensitive to the COVID-** crisis.

Financial performance of car LCD players World, **** - **** Source: ****

As a result, the big names mentioned above have been forced to implement cost-cutting policies, which involve reducing the size of their fleets.The development of car-sharing solutions within cities, with the arrival of new players such as Autolib, has shown that barriers to entry in this segment are moderate.

The car LCD business is registered under NAF ...

3.2 Two types of branch network

According to an ANFA report, short-term rental companies organize their branch networks in several ways:

Branches: these are in the name of the parent company, and are generally located in railway stations and airports. Half of Avis branches worldwide are located in airports; Franchises, which are independent brands benefiting from the franchisor's brand name.

In ****, franchises accounted for around two-thirds of all car rental outlets, although major brands such as Europcar, Hertz and Avis had **% of their outlets operating as branches.

Today, what we're seeing is slow growth in the number of establishments, in contrast to the relatively high concentration of the sector. In ****, there were **** establishments specializing in short-term vehicle rental, including branches and franchises.

Number of vehicle rental establishments France, **** - ****, number of establishments Source: ****

Below is a map illustrating the distribution of these players across France (***). It clearly shows the concentration of a large number of vehicle LCD establishments in the Île-de-France region.

Source: ****

We may well wonder how the number of agencies in the region will evolve, given that new players are offering short-term rentalsagency-free. The car is delivered directly to the customer, in less than * hours forCarlili**/** forToosla. Users are looking for ever simpler solutions, which ...

3.3 The rise of rental comparison services

Numerous car rental comparison sites reference the rates of most of the major "historic" car rental companies on the market, enabling customers to select a vehicle at the lowest possible prices, in complete transparency. These comparators are increasingly numerous, and can be specialized in the car market (***).

According to Similarweb, a site specializing in website traffic measurement, when users type the keywords "location voiture" into Google, they click on kayak.fr in **% of cases, rentacar.fr in **% of cases, and liligo.fr in **.**% of cases (***). Among the top ** sites visited by typing these keywords, **.*% of users go to car comparison sites.

The growing importance of mobile applications

Most long-established brands, such as car rental comparison services, now have their own smartphone app to facilitate vehicle reservation, while shared mobility apps rely heavily on their mobile app to organize their collaborative platform. CtoC companies such as Drivy and Zipcar operate mainly through their apps.

One-to-one

The digitization of the sector has also led to the emergence of a genuine short-term rental market between private individuals, estimated at *.* billion euros. In a way, this is the uberization of the market.

evaluation of the potential of private car rental between individuals France, ****, % Source: ****

3.4 Car LCD value chain

As explained above, the players in the car LCD sector are diversifying.

Car manufacturers: They produce the vehicles that will be used for leasing. Manufacturers can sell their vehicles directly to rental companies, or offer leasing contracts. Car rental companies: These companies buy or lease fleets that they make available to customers for short-term rentals (***). Booking platforms: Online platforms such as Rentalcars, Kayak or Auto Europe enable customers to compare prices and services from several rental companies and book their car directly online. Insurers: They provide insurance cover for rented vehicles, including third-party liability insurance, collision coverage, and other additional guarantees.

Source: ****

4 Offer analysis

4.1 Car ranges at the heart of differentiation strategy

Passenger cars and light commercial vehicles

Car rental is governed by APE/NAF code **.**A. It includes "cars and other light motor vehicles". Different classes of car can be distinguished, and some companies, such as ADA, specialize in light commercial vehicles (***).

Rental vehicle classes

ACRISS(***) is a vehicle classification system used by most car rental companies. It breaks down into * letters for each vehicle, representing the vehicle's Category, Type, Gearbox/Transmission and Fuel. [***] Rental car pricing is therefore based on this classification.

4.2 Short-term car rentals: average prices

Considering the restricted scope of the major traditional market players (***). Volume has grown steadily over the period in question, with a CAGR of *.*% between **** and ****.

However, the average reservation duration does not really seem to be increasing, as shown in the following graph:

Trend in average vehicle reservation time France, **** - ****, in days Source : Auto Infos In fact, although the average reservation time rose in **** (***). The average daily rental rate has risen sharply in recent years: Evolution of the average daily rental price of a vehicle France, **** - ****, in € Source: ****

In fact, between **** and ****, the average daily rate for car rental doubled, then fell by **% between **** and ****. Despite the arrival of new players on the market, it seems that there is no competition on price.

Lastly, booking anticipation has fallen drastically:

Evolution of vehicle reservation anticipation France, **** - ****, in days Source: ****

This decline has been made possible by players' quest for flexibility, as they seek to stand out from the competition by offering services that are ever easier to access and use. The arrival of new players operating without agencies is also responsible for this drop in advance bookings.

Source: ****

4.3 Carsharing and the arrival of new players at the heart of a renewed offer

The Citiz car-sharing network, present in over *** towns and cities in France with more than *,*** shared vehicles, offers several subscription formulas.the price varies according to the number of hours of use per month, the time and distance covered, and the category of vehicle (***). [***]

In the Paris region, where shared mobility is most widely used, the prices set by Ubeequo, the start-up that in May **** acquired the tender for the shared vehicle service launched by the French government.tender for the shared-vehicle service launched by Paris City Hall[***], offers two formulas (***), the first with no subscription, the second at €** per quarter.

Moreover,the global pandemic will have reshuffled the cards and accelerated the global transformation of the market. By launching Uber Rent in ****, its new short- and long-term car rental service, Uber is attempting to enter the short-term rental market: a service provided by third-party agencies, in partnership with Irish tourism technology specialist CarTrawler. France is thus the *ᵉ country in the world after Australia where Uber Rent is made available. CarTrawler is already a key player in the tourism sector, technology partner to over *,*** online travel agents worldwide and *** airlines, for the aggregation of multimodal transport offers (***).

By ****, according to ADEME, ...

4.4 The digitalization and electrification revolution

The sector's historical players (***) have been extremely weakened by the health crisis, which could be a sign that their business model is coming to an end. Indeed, the trend is towards simplifying the customer experience and seeking greener mobility. New entrants have already entered this niche, such as Carlili, which has chosen to buy *** Tesla cars[***].

But this conversion could become a headache for industry leaders, as the French Mobility Orientation Law (***) obliges fleet managers to invest in electric cars. The target for low-emission models is set to rise rapidly, from **% of fleet models in ****, to **% in ****.

trend in the rate of fleet electrification required by law France, ****-****, in % Source: ****

Electric cars are also becoming increasingly popular in the new vehicle sales market. In fact, the number of electric cars sold rose by ***% between **** and ****. This means that rental agencies will have to shift their fleets to electric vehicles.

Trend in the number of electric and hybrid cars sold France, **** - ****, in thousands Source: ****

However, electric cars are shunned by customers. As a result, the utilization rate of an electric car at a short-term rental company is only **%, compared with **% for a combustion or hybrid model. This lower number of ...

5 Regulations

5.1 Supervision of rentals between professionals and private individuals

The website jesuisentrepreneur.fr lists the regulations in force for car rental companies, as well as for individuals and companies using their services.

All car rental companies must be registered with the Registre du Commerce et des Sociétés.

Renters must be at least ** years old and have at least * year's driving experience.

The French Civil Code (***) governs rental contract provisions, as does the ministerial decree of April **, ****.

Commercial vehicles are governed by the French Transport Act (***).

In addition, the the Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (***) specifies the information required for each car rental contract, the obligations of the lessor and lessee, as well as financial and insurance conditions.

5.2 Rental between individuals

Vehicle leasing between two private individuals is not governed by the same legislation, since the French Consumer Code only applies to contracts between companies and private individuals.

For CtoC car-sharing, the general law of obligations under the Civil Code applies. A legal framework has also recently been put in place to facilitate access to carsharing solutions.

Article ** of law no. ****-*** of July **, ****, law no. ****-** of January **, ****, and law no. ****-*** of August **, **** encourage the development of carsharing via regulations linked to:

Urban planning: reserved parking spaces, preferential rates, etc. Sustainable development: Energy transition for green growth[***]

5.3 Impact of the Mobility Orientation Bill

The draft law on the orientation of mobility encourages industry players to make their fleets greener, with multi-year targets; this affects corporate fleets, as well as leasing and LCD fleets with more than *** vehicles.

The minimum percentage of low-emission vehicles must be as follows:

january *, ****: **% january *, ****: **% january *, ****: **% (***) january *, ****: **% (***)

Source: ****

The gradual greening of the French vehicle fleet can thus be observed, with registrations of electric vehicles continuing to rise, and LCD leasing companies accounting for around *% of registrations for this type of vehicle in the first * months of ****.

Electric vehicle registrations France, first * months ****, as % of total Source: ****

6 Positioning the players

6.1 Segmentation

  • Europcar
  • Hertz
  • Avis Budget Group
  • Sixt
  • Ouicar
  • Citiz
  • Ubeeqo
  • Enterprise holdings
  • Ucar
  • DriiveMe
  • Drivalia
  • Virtuo
  • Getaround (Ex drivy)
  • Rent a Car
  • Hitech Software
  • Ada (Rousselet Groupe)

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