Rental car companies made a whopping $38 billion in revenue during the 2023 calendar year, per a new report. The $38 billion figure represents a new record for the rental car market, and a five percent growth compared to the 2022 calendar year. The new revenue record was realized amid a drop in revenue per vehicle.
The new insights were published in the latest 2023 fact book from Auto Rental News. According to the fact book, the rental car industry made $38.37 billion in revenue this year, a five-percent increase compared to a record-setting 36.56 billion in revenue recorded for the 2022 calendar year. The five-percent growth in revenue for the 2023 calendar year is substantially slower than the 23-percent year-to-year growth rate and 30-percent year-to-year growth rate recorded for 2021 and 2022 following the pandemic-related lockdowns of 2020.
Notably, Auto Rental News states that the slower growth rate for 2023 was in fact “welcomed as it came with a return to more normalized seasonal fleeting and de-fleeting patterns.” The outlet also notes that fleet and other expenses increased by 15 percent, lowering earnings. Additionally, greater vehicle availability for the 2023 calendar year decreased revenue per unit to $1,412 per month, down from $1,424 per vehicle per month last year. The 2023 calendar year also recorded 1.05 million new vehicles sold into rental fleets, and 2.26 million vehicles in service.
The report also indicates that demand for electric vehicles varies, with some operators now pinning down the right formula for offering EVs, including the Chevy Bolt EV, which is cited as offering a low cap cost, in particular with the $7,500 federal inventive.
The report also includes a 2024 business outlook survey, which includes survey responses from 103 franchised and independent rental car companies. Forty-nine percent of respondents indicated that they believe revenue will increase in 2024, with 15 percent predicting a decrease, while 36 percent predict net profit will increase and 41 percent predicted net profit will decrease. Thirty-four percent predicted that rental rates will increase, while 20 percent predicted that rental rates will decrease.
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Wow rental car companies are eligible for $7500 worth of corporate welfare per vehicle?
Sounds like they can turn them out of their fleet quickly and make out smelling like a rose and fatten the bottom line.
The “big guy” constantly squawks about corporations not “paying their fair share” this seems to fly in the face of this philosophy.