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 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 rental company is the lessor.

In 2019, there were almost 8 million short-term vehicle rentals. The combination of several phenomena - sustained growth in the tourism business, the emergence of short-term rental as an alternative to vehicle ownership, but also the growing popularity of leasing - has led to an increase in the number of short-term rentals.the 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 leading companies, Europcar and Hertz, have been filing for bankruptcy in the USA since 2020, due to their financial difficulties. However, the upturn in tourism and the lifting of health restrictions in Europe, and particularly in France, point to a strong recovery in activity in 2021, with sharp price rises in the most popular regions.

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 multiplication 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 ...

2.1 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 ...

2.2 Cyclical demand and changing booking times due to the importance of tourism

A quick analysis of the keyword "car rental" typed into Google helps to illustrate this fact (***): the search peak was reached in the week from July ** to August *, **** in France, twice as many as in December of that same year, i.e. the period of the major summer vacations when tourist ...

2.3 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, ...

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 Digitization of the sector

Carsarerented via several channels: Internet, physical agency, telephone and mobile application.

Internet

Customers are increasingly likely to book a rental car via the Internet. This accounted for **% of bookings in **** according to a GMV Conseil study, compared with **% directly in the agency. These figures were **% and **% respectively in the previous study ...

3.4 Car LCD value chain

As explained above, the players in the LCD car rental sector are diversifying. The following diagram describes the different types of rental agencies and their relationships with other players:

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 in the month, the time and distance covered, and the category of vehicle (***). [***]

In the Paris region, where shared ...

4.4 The digitization 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 ...

5.1 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 ...