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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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
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, ...
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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
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, **** - ...
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 ...
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 ...
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 ...
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 ...
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 ...
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)
List of charts presented in this market study
- The global car rental market
- Evolution of the short-term car rental sales index
- Short-term car and light vehicle rental sales
- Demographic breakdown of Europcar customers
- Evolution of interest in the "car rental" search on Google
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Latest news
Hertz continues to pay the price for its Tesla gamble - 06/08/2024
- - Hertz to order 100,000 Model 3s from Tesla in October 2021.
- - 11% of Hertz's U.S. fleet was electrified, including 80% with Teslas, compared with an average of 2-3% for other rental companies.
- - Repair costs for electric models are on average twice as high.
- - Electric car sales growth of 1.3% in 2023.
Hertz changes boss after disastrous bet on electric cars - 17/03/2024
- - Electric vehicle order: 100,000 electric cars to Tesla for $4.2 billion.
- - Hertz announces plans to sell 20,000 electric cars, representing a third of its "clean" fleet.
- - Repair costs for electric vehicles are on average twice as expensive as those for conventionally powered vehicles.
- - Its German counterpart, Sixt, has also expressed its intention to reduce the number of Teslas in its fleet.
Stellantis signs mega contract with Sixt - 17/01/2024
- Stellantis has signed an agreement to supply up to 250,000 cars to Sixt.
- Deliveries will begin in the first quarter of 2024, and run through to 2026.
- Hertz had reported an order for 100,000 Teslas in autumn 2021.
- Sixt had signed with BYD for 100,000 cars in October 2022.
- The short-term car rental sector accounted for 8.25% of car registrations in France last year, or nearly 146,000 cars.
United States: Hertz gets rid of its electric cars and switches back to gasoline - 12/01/2024
- Hertz plans to sell 20,000 electric cars, or 20% of its "clean" fleet.
- By 2021, Hertz had placed an order with Tesla for 100,000 Model 3s.
- Currently, 11% of Hertz's US fleet is made up of electric vehicles, 80% of which are Tesla.
- Among Hertz's competitors, the proportion of electric vehicles in their fleets is generally between 2% and 3%.
- Repair costs for electric cars are on average twice as high as for internal combustion vehicles.
- Hertz has signed an agreement with General Motors for the purchase of 175,000 electric vehicles, and another agreement for the purchase of 65,000 Polestar models.
Hertz pays dearly for its giant deal with Tesla - 20/11/2023
- In October 2021, Hertz ordered 100,000 Model 3s from Tesla
- Currently, around 11% of Hertz's fleet (590,000 cars) are electric cars, 80% of which are Tesla (Model 3 and Model Y).
- Avis and Enterprise's fleet of electric vehicles in the United States does not exceed 1 or 2% today, according to Morgan Stanley.
- The two main risks for Hertz in the coming years are "higher operating costs" and a risk "linked to the residual value" of the cars.
- Repairing an electric car costs "about twice as much" as a traditional car, according to Hertz's CEO.
- Lower prices have reduced the resale value of its cars and increased its depreciation.
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