Automotive Equipment Rental and Leasing Market Characteristics
The automotive equipment rental and leasing market includes companies involved in renting or leasing trucks and passenger cars without drivers and utility trailers. These establishments operate from a rent-like facility. Some automotive equipment rental and leasing companies offer short-term rental and long-term leases, while others provide both types of services.
Competitive Landscape of the Automotive Equipment Rental and Leasing Market
Major players in the global automotive equipment rental and leasing market include Enterprise Holdings, The Hertz Corporation, Daimler, Avis Budget, and Volkswagen Leasing GmbH. The top five competitors in the market made up about 17.0% of the market in 2017. Enterprise Holdings was the largest competitor with about 5.8% of the market, followed by The Hertz Corporation, Daimler, Avis Budget, and Volkswagen Leasing GmbH. In December 2017, Avis Budget Group, Inc. acquired France Cars for approximately $45 million. France Cars is a leading car rental service provider in Paris, France. Through this acquisition, Avis Budget Group, Inc. becomes second largest light commercial vehicle fleet operator in France. France Cars is a privately-held vehicle rental company based in France.
The countries covered are China, India, Japan, UK, Germany, France, Italy, Spain, Russia, USA, Brazil and Australia.
Automotive Equipment Rental and Leasing Market Size
The automotive equipment rental and leasing market is expected to reach at a value of $330 billion, growing at a CAGR of 7.5% in the forecast period. This is mainly due to emerging markets growth - the automotive equipment rental and leasing market is expected to be driven by growth in emerging markets. Emerging countries such as India, China and some African countries are expected to continue to see generally higher levels of growth than the developed markets during the forecast period. For instance, India’s GDP is expected to grow at 7.4% and China is expected to grow at about 6.8% in 2018. Economic growth coupled with an increase in urbanization is expected to increase the demand for mobility in these countries, thus driving the demand for vehicle leasing services and growing popularity of electric vehicles - the automotive equipment rental and leasing market is expected to be driven by the growing sales of electric vehicles in the forecast period. Leasing is increasingly being used as a key method to drive electric vehicle sales, especially in developed markets. By offering competitive monthly payment and vehicle return options, leasing compared with other purchasing methods significantly eases consumer concerns around electric vehicle cost and technology obsolescence. In 2015, about 75% of electric vehicles were sold via leasing in the US; the lease penetration in new electric vehicles is expected to increase further thus driving the market.
However, the market for automotive equipment rental and leasing is expected to face certain restraints from several factors such as customer service and transparency - the automotive equipment rental and leasing market will be challenged by the need to maintain transparency and high customer satisfaction levels in their service. Lack of transparency in the information system can divert customers to other mobility options such as public transport. The major challenge for vehicle leasing companies will be to provide user-friendly experience from vehicle bookings to vehicle returns process. In 2015, the UK-based Competition and Markets Authority conducted a review of the car rental industry and ordered companies to offer transparent pricing, clear terms and conditions and explanation of the full extent of damage cover; this was done to maintain transparency in car rental services and growing popularity of on-demand taxi services - the automotive equipment rental and leasing market will be restrained by the growing popularity of on-demand taxi services. These on-demand taxi service providers provide efficient and cost-effective mobility services using a mobile app. The global taxi services market is estimated to grow at a CAGR of about 8.46% during 2017-2021; this is expected to hinder the growth of the car rental and leasing market. Uber, Ola, Lyft, Hailo, Grab Taxi, Didi Dache and Gett are major on-demand taxi service providers globally.
Automotive Equipment Rental and Leasing Market Segmentation
The global automotive equipment rental and leasing market is further segmented based on type and geography.
By Type - The automotive equipment rental and leasing market is segmented into passenger car rental, passenger car leasing, truck, utility trailer, and recreational vehicle rental and leasing. Among these segments, the passenger car rental market accounts for the largest share in the global automotive equipment rental and leasing industry.
By Geography - The global automotive equipment rental and leasing market is segmented into North America, South America, Asia-Pacific, Eastern Europe, Western Europe, Middle East and Africa. North America’s automotive equipment rental and leasing market was the largest in the world. It currently accounts for about 38% of the global automotive equipment rental and leasing market. The automotive equipment rental and leasing market is well established in North America. The major international vehicle rental and leasing companies are headquartered in the USA. Automotive equipment rental and leasing companies in North America use open-end model of leasing, i.e. an agreement that requires the lessee to make a payment at the end of the term to purchase the asset.
Automotive Equipment Rental And Leasing Market Trends
Consolidation in the market is one of the major trends witnessed in the automotive equipment rental and leasing market.
Potential Opportunities In the Automotive Equipment Rental And Leasing Market
With increase in emerging markets growth and technological advances, the scope and potential for the global automotive equipment rental and leasing market is expected to significantly rise in the forecast period.
Automotive equipment leasing companies are using technologies such as big data to improve customer service and increase vehicle life. Big data is large amounts of data that can be analyzed to gain insights and drive decision making. Big data would allow the leasing company to remind the driver to book a car for the service or replace engine oil. This technology could also help leasing companies in minimizing driver risk and prevent the number of accidents, by giving the companies insights about the driving habits and whereabouts of its fleet. Companies such as Lex Auto lease have been increasingly using big data to drive cost reduction and risk mitigation.