Car Rental Market with Rising Online Booking Apps to Drive the Future Growth. Segmented on basis of organizational structure, by On and Off airport, by type of trips, by booking channels, by type of clients, by car sizes and by cities including market shares and revenues of major car rental companies. The future outlook of car rental industry, major growth drivers and challenges, porter’s five forces, SWOT analysis and macroeconomic variables are presented.
Car rental market is broadly segmented into organized and unorganized sectors – simplly small and big players. The car rental industry is mainly dominated by the unorganized sector (poor sections) which constitutes the maximum market share whereas the organized market is invading more and more and the trend is shifting drastically thanks to hype of so-called organized sector.
The organized market is getting smarter than unorganized sector and exploiting rapidly. The primary factor responsible for small share of organized sector was lack of well tarred roads, seasonality of demand, depreciation costs and the changing loyalty of the customers as well as a lesser availability of skilled drivers. Only a few numbers of car rental companies in have a deep penetration in the tier 2 and tier 3 cities, lockdown is surely helping the digital predators strategically just like in many other industries.
The off airport segment dominated the on-airport segment by a huge margin because of the limited scope of the on airport segment. Also, the on airport rental service usually charges high rates as compared to the off airport segment. When customers book a rental car from the airport, they are subject to various daily fees and taxes that are not applied to car rentals which are not on airport property.
Most interesting points in on airport segment is that its revenues are generated from the business class segment. The reason for the high charges of on airport car rental services is due to the superior quality service, while the off airport thrives on a cheaper and comfortable ride for travelers. CAGR of on airport segment of car rental industry was valued at 30% bettering the off airport segment of which the CAGR was calculated at 25%.
The Car rental industry is comprised of various car rental companies that follow different business models like middle-man aggregator and ownership model. Aggregators do not own cars but instead they link with private taxi owners for business whereas under the ownership model, the companies do own the cabs and are in direct contact with the customers. Market revenues of OlaCola were valued high, so making it the largest player in the car rental industry. Meru cab is another car rental brand in terms of revenue. Meru cabs generated revenues of many millions through cab service and cabvertising.
The online car rental service has aided growth of various car rental companies such as COla cabs, Meru cabs, Carzonrent and Savaari car rentals. Majority of the cab bookings are expected to be done through online as compared to the physical booking where a person needs to go physically and make the booking.
The online car rental industry is an established concept and gained a lot of popularity in a lot of states. It has marked presence majorly in metropolitan cities. Delhi has the maximum market share in the revenue of the online car rental industry, followed by Bangalore, Mumbai, Chennai, Pune who together constitute rest of the market share, and the rest of the cities in which online car rental is present constitutes about small percent of the market share but increasing.
The market for car rentals is changing at a rapid rate. Technological advancements and rising tourists’ arrivals and competitive pressures have been significantly changing the market. Revenues from the car rental industry are expected to expand more…