European rental car market grows by 24% in the first half of 2024

Car rental companies registered around 779,000 new cars in the first half of 2024. This 24% increase over the same period last year is an indication that the market is returning to normal – although not quite as far back as in the first half of 2019, when 1.1 million vehicles were added to rental fleets across Europe.

Falling rental car prices are another sign that the market is returning to normal, says Dataforce, which collected rental car registration figures from 20 European countries.

The largest market for new rental vehicle registrations in the first half of this year was Germany (around 190,000 units), followed by Spain (152,000), France (132,000), Great Britain (95,000) and Italy (84,000).

These five major markets represent 84% of the registrations recorded by the vehicle data specialists. The others are Denmark and the Netherlands (both 17,000), Sweden (16,000), Belgium, Switzerland and Norway (all 10,000), Austria (9,000), Portugal (8,000) and Poland (7,000), Finland (5,000), Iceland and the Czech Republic (both 4,000), Lithuania (3,000) and Latvia and Slovakia (both 2,000).

The increase is due to a more stable supply chain, which has allowed OEMs to refocus on customers with short-term rental contracts. The robust performance of the rental car industry means that one in ten vehicles registered in Europe in the first half of this year was a rental car.

As a popular holiday destination, Spain has the highest rental density. One in four vehicles registered in the country is a rental car. Spain is the fifth largest car market overall, but the second largest rental car market after Germany.

The largest relative increase in rental applications was recorded in the UK, where they increased by 111% year-on-year.

Another notable development is the decline in the share of BEVs in rental registrations, which fell from 6.4% in the first half of 2023 to 3.8% in the same period this year (or just under 30,000 in total).

Two main factors explain the unpopularity of electric vehicles in the rental industry. First, customer demand is low due to a lack of familiarity with electric cars, concerns about range and charging, and questions about whether and how to return the vehicle “full”. The other major disadvantage: Due to the uncertainty about the residual value, rental companies are forced to charge relatively high prices for electric vehicle rentals, which reduces both their willingness to offer this option and customer demand for a rental electric vehicle.

Most (57.3%) of the rental cars registered in the first half of 2024 are still petrol, followed by diesels (26.9%), mild hybrids (6.1%), plug-in hybrids (4.8%) and only then battery-powered electric vehicles (3.8%).

Image: formulanone/Flickr – CC BY-SA 2.0