Rising number of air travellers and millenials to fuel luxury car rental industry
Now that travel restrictions have been eased, the market is expected to recover gradually
image for illustrative purpose
The global luxury car rental market size was valued at $45.31 billion in 2023. It is now projected to grow from $49.15 billion in 2024 to $89.60 billion by 2032, exhibiting a CAGR of 7.8 per cent during the forecast period.
The luxury car rental market in the U.S. is projected to grow significantly, reaching an estimated value of $13.14 billion by 2032, driven by the low interest for car ownership among the millennials.
A luxury car is more expensive than a standard car and offers better performance, levels of comfort, quality, and status. The term refers to both the characteristics of the car and the manufacturer's
brand recognition.
Luxury car rentals are growing in popularity. There are companies or groups that rent out high-end vehicles for a fee. Depending on the person, this arrangement may endure for an hour, a day, or even weeks. Luxurious transportation, the ability to choose from a variety of models, and assistance in projecting the appropriate image for particular events are some of the main factors driving exotic vehicle
rentals' appeal.
The Covid-19 pandemic significantly impacted the global luxury car rental market as travel restrictions, lockdown measures, and economic uncertainties led to a sharp decline in the demand for luxury car rental services. With reduced travel and tourism activities, luxury car rental companies faced challenges in maintaining their operations and generating revenue. Now that travel restrictions have been eased, the luxury car rental market is expected to recover gradually. Rising number of air travellers due to decreasing fares, growing disposable income, and expanding leisure and tourism industry across emerging and developed economies are likely to fuel the demand for car rental services across airports. For instance, according to the International Air Transport Association (IATA) forecast in October 2018, the number of air travellers globally could double to 8.2 billion by 2037.
Moreover, businesses are expanding globally, further influencing the growth of business travellers. Therefore, rising demography of corporate or business travellers is surging the car rental industry's demand for premium executive cars.
With rising income levels and increasing international travel, an increasing number of people want to try out new cars by renting them.
Luxury car rental is among the fastest-growing sectors of the Indian transport industry. The demand for luxury cars in India is growing, as is the demand for luxury car rentals. The young crowd wants to experience every new car on the market. This also establishes the fact there is more awareness about the automotive industry than ever before.
The growth of the luxury car rental industry is driven by several factors, including the increase in foreign and domestic travellers in the country and rapid urbanization. The consumer base for luxury car rentals is growing.
India’s millennials, who form the largest demographic group in the country, are the main reason behind the growth of the luxury car rental market. India has a young population with an average age of 30 years. Young adults prefer renting a car for business meetings or weekend getaways with family rather than owning one, mainly due to the high cost of maintaining personal vehicles. They prefer to drive in comfort and luxury, and the need for a car that shows their status and the desire to experience all the luxury cars available are other factors driving the growth in this market.
Post-Covid, young Indians are choosing luxury cars for the safety, hygiene, and privileges that they provide.
Overall, the luxury car rental industry in India is expected to continue to grow in the coming years as more and more people become interested in luxury cars without the commitment of ownership. The high cost of owning a luxury car, coupled with the desire for flexibility and the need for status symbols, is driving the luxury car rental trend in India.
Luxorides , a premier luxury car rental and concierge service, offers an unmatched blend of elegance, comfort, and professionalism. Catering to discerning individuals and companies across India’s top-tier cities, Luxorides promises a travel experience that transcends expectations.
“Whether it is for business, leisure, or special events, our services are designed to provide unparalleled convenience and luxury,” say Aaditya Mishra and Rahul Nain.
Their passion for luxury cars and vision to democratize high-end travel led to the creation of Luxorides, a service that bridges the gap between luxury
and accessibility.
By the year-end, the revenue in India's car rentals market is expected to reach $3.16 billion. The projected annual growth rate (CAGR 2024-2029) is 6.80 per cent, resulting in a projected market volume of $4.39bn by 2029, by when the number of users in the car rentals market is expected to reach 119.80 million users.
