Automobile rental services is a business model wherein vehicles are rented to customers at a predefined rent for a short period of time ranging from few hours to weeks. It offers improved mobility without having car ownership and provides flexibility of vehicle choice depending upon purpose & budget. Conversely, vehicle leasing is a commercial financing product where financing agent purchases & leases the vehicle to the customer against monthly rental payments. Vehicles are primarily leased by businesses to reduce operational costs. Leasing also offers flexibility to replace the vehicle with a newer model after expiry of the vehicle leasing agreement.
Company leased vehicles are used by either senior management employees or field/sales staff to improve work efficiency and enable lower cost as compared to conveyance reimbursement. The added benefits of leasing is that the vehicle can be used as a branding medium for company promotions.
Broadly, global vehicle renting market is classified by vehicle type and applications. Segmentation by vehicle types include luxury car, executive cars, economy cars, sports utility vehicles (SUVs) and multi utility vehicles (MUVs). However, by applications, the market is segmented into airport transportation, local usage, outstation and others. Of these segments, airport transportation controls the majority of the market share. Many vehicle renting service providers offer value added services such as GPS navigation systems, insurance, entertainment systems and easy accessibility through online booking.
Global vehicle rental market is highly fragmented with top five players dominating the market. The market is on the verge of consolidation. In order to stay competitive and increase global presence, key players in vehicle rental market are focusing on enhancing customer experience. Vehicle rental and leasing market is expected to grow tremendously attributing to the factors such as rising global corporate & leisure tourism, increase in disposable income & urbanization and ease of accessibility. However, stringent emission standards and unstable crude oil prices are expected to restrain market growth.
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