Australia Car Rental Market Size, Share, Opportunities, And Trends By Type (Economy Cars, Luxury Cars, Executive Cars, SUVs, MUVs), By Mode Of Booking (Online, Offline), By Rental Category (Local Transport, Airport Transport, Outstation Transport, Others) - Forecasts From 2023 To 2028

The Australian car rental market was valued at US$ 4.509 billion in 2025 and is projected to grow at a CAGR of 5.20% over the forecast period, attaining US$ 5.697 billion by 2030.

Australian Car Rental Market Highlights

• Economy cars hold 33.5% market share, driven by budget-conscious travelers.
• Increased competition fuels innovations in customer experience and service offerings.
• Growing demand for eco-friendly vehicles reflects sustainability trends.
• Rising domestic tourism boosts demand for flexible, short-term rental options.
• Digital platforms enhance booking convenience, driving market accessibility and growth.
• Urbanization increases the need for cost-effective, on-demand transportation solutions.
• RV rental market sees robust growth, catering to adventure-seeking domestic travelers.

Car rental refers to hiring an automobile for a short period of time, ranging from a few hours to a few weeks. One of the key developments in the Australian car rental market is the mergers and acquisitions that have taken place in recent years, which have further helped to consolidate the market and increase the dominance of the larger players. Partnerships have also played a significant role in supporting the growth of the Australian car rental market in terms of online booking.

The major factor propelling the demand for the car rental market in Australia is the increasing tourism in the nation. The increasing utilization of the internet in the nation is also propelling market growth during the estimated timeline. Various car rental facilities are available in the Australian market, including car leasing, hourly renting, outstation renting, and car sharing. Car rental services offer multiple benefits to users, as they offer a cost-effective mode of transportation, comfort, and convenience. The increasing internet utilization in the nation is among the major factors propelling the market. With this rising utilization of the internet, the demand for online service platforms increases, including online car rental, as renting or booking vehicles offers convenience. The Australian Communications and Media Authority, in its report, stated that in the nation, about 93% of the total adult population used the internet in 2022.

Some of the major market players are Hertz, Europcar, Avis, Sixt, East Coast Car Rental, Turo, Enterprise Rent-A-Car, Alamo, Dollar Car Rental, and Thrifty Car Rental, among others. Increasing domestic and international tourism in Australia is among the key factors propelling the car rental market growth in the nation. The growing internet utilization in the nation is also boosting the market during the estimated timeline.

Australian Car Rental Market Drivers:

• The growing tourism sector in the country

Australia is one of the leading tourist destinations, and the country’s tourism sector is one of the largest contributors to the country’s GDP growth. Owing to the travel restriction imposed globally to prevent the widespread of COVID-19 gave a heavy blow to Australia’s tourism sector. The Australian government provided $1 billion during the pandemic period to assist the tourism business. The ease in the lockdown and travel restrictions has been a major factor behind the upliftment of tourism activities in Australia, which has positively impacted the sector’s GDP growth. For instance, according to the Australian Bureau of Statistics, in 2021, Australia’s Tourism GDP in chain volume terms was valued at $35.1 billion, which represented a significant increase of 26.4% in comparison to 2020’s GDP. With the growing tourism sector in Australia, the demand and usage of car rental services are also expected to increase in the country since tourists hire cars for sightseeing.

The rising tourism in the nation is among the key factors propelling the Australian rental car market growth. With the increasing number of tourist visits, the demand for car rental and leasing services, like airport drop and pick-up, local destination visits, and other related services, rises significantly. The number of international tourists visiting Australia has significantly increased compared to the past few years. The Australian Trade and Investment Commission, in its report, stated that the nation witnessed about 7.5 million trips by September 2024. The agency further stated that by September 2024, the holiday trips were recorded at 3.1 million, whereas the business and educational trips were recorded at 780,000 and 477,000, respectively.

• Favorable initiatives taken by the Australian government.

For instance, in March 2022, the Minister of Trade, Tourism and Investment launched the “THRIVE 2030” long-term national strategy, which aimed to boost the activities that promote in tourism business in Australia. The strategy further focuses on reaching the value of the visitor economy to A$230 billion by the year 2030.

Moreover, in November 2022, the Australian Business Growth Fund announced investments of $15 million in HM Consolidated Pty Ltd., which is one of the fastest-growing tourism providers in Australia. Furthermore, in October 2021, the New South Wales government announced an investment of $530 million to boost the hospitality and tourism sector in the state.

Australian Car Rental Market

• The demand for economy cars is rising rapidly

Economy cars are popular in Australia's car rental market as they are less expensive than luxury or mid-size cars, appealing to budget-conscious tourists, including families, backpackers, and students. In the long run, economy cars lower travel expenses overall due to their fuel efficiency, especially given the recent erratic fuel prices.

Most tourists are attracted to Australia because of its unique landscapes and landmarks, such as Uluru, the Great Barrier Reef, and the Great Ocean Road, a coastal road trip. To control their traveling expenses, most tourists seek affordable transport. Since they are smaller, economy cars are great for city places where parking and maneuverability are important. This meets the requirements of tourists who are heading to big cities such as Sydney, Melbourne, or Brisbane. Economy cars are also often chosen by business and urban commuters for short-term rentals, such as day or weekend getaways.

Firms like Splend, which aims to see 2,000 EVs in their portfolio by the end of 2024, have secured funding to expand their EV rental services. Keeping customers as the priority, Uber launched "Uber Rent," allowing customers to rent cars directly from the Uber app. A family-owned business, Simba Car Hire, is looking to make its presence felt across Australia, opening operations in every capital city within two years. Moreover, the Australian Bureau of Statistics reports that there were 630,700 short-term travelers in September 2024, which is 46,070 more than the same month the year before.

• The online mode of booking is becoming more popular

The car rental market in Australia has seen significant growth in recent years due to increasing consumer demand for convenient and efficient ways to rent a car. The online mode of booking car rentals in Australia has become increasingly popular and is now a key channel for car rental companies to reach their customers. The car rental market in Australia has increased significantly due to new products and services, changes in government policies, and increased demand for online booking. The Australian car rental market has shifted towards digital reservations due to the convenience of online platforms. Customers prefer online services because of their flexibility in booking, vehicle options, and ease of price comparison. This trend has been further accelerated by the integration of car rental services into well-known travel and ridesharing applications. For instance, to improve user convenience and increase market accessibility, Uber launched 'Uber Rent' in August 2024, allowing users to rent cars directly from the Uber app.

Moreover, customers increasingly value the ability to make reservations at any time and from any location, shunning traditional in-person or phone-based booking methods. Online platforms offer this flexibility. The more digitally literate Australians become, the more likely they are to use online resources for car rentals. Customers in Australia can make reservations on the go because of its high smartphone penetration rate. Further, online platforms allow customers to compare costs, car options, and services offered by different providers quickly. Some of the online platforms provide better bargains during off-peak hours by using algorithms to modify prices based on demand. Promo codes and deals available online encourage customers to make digital reservations. Additionally, many businesses highlight how convenient online platforms are to attract clients. Online booking systems are part and parcel of any business's operations and expansion plans.

Splend is a digital-first platform catering to delivery and rideshare drivers who reserve EVs online. The business model for Splend aligns with the general trend of online car rental bookings, depending on online interactions for reservations, payments, and vehicle selection. Simba Car Rental emphasizes transparent pricing as one of its key competitive advantages through its online platform. Consumers can make reservations online with assurance regarding prices. Simba's national expansion mainly depends on digital marketing and online reservation platforms to reach a wider audience.

Australian Car Rental Market Key Developments:

• In June 2021, Toyota launched a short-term car-sharing and rental app “KINTO” in Australia, which enables users to rent the company’s automobiles on an hourly basis from any of the company’s dealership locations.
• In October 2022, US-based car-sharing company Turo announced its plans to expand its car rental business in Australia, thereby expanding its presence in the country. Also, in June 2022, Europcar Mobility Group launched new subscription-based car rental services in Australia under its “Innovation Drive” initiative.

• In 2020, Avis partnered with the ride-hailing company, Uber to offer discounted car rentals to Uber drivers in Australia. This partnership not only increased the visibility of Avis in the market but also provided a new revenue stream for the company.

Market Segmentation:

• By Car Type
  • Economy Cars
  • Luxury Cars
  • Executive Cars
  • SUVs
  • MUVs
• By Mode of Booking
  • Online
  • Offline
• By Rental Category
  • Local Transport
  • Airport Transport
  • Outstation Transport
  • Others

1. EXECUTIVE SUMMARY 

2. MARKET SNAPSHOT

2.1. Market Overview

2.2. Market Definition

2.3. Scope of the Study

2.4. Market Segmentation

3. BUSINESS LANDSCAPE 

3.1. Market Drivers

3.2. Market Restraints

3.3. Market Opportunities 

3.4. Porter’s Five Forces Analysis

3.5. Industry Value Chain Analysis

3.6. Policies and Regulations 

3.7. Strategic Recommendations 

4. AUSTRALIA CAR RENTAL MARKET BY CAR TYPE

4.1. Introduction

4.2. Economy Cars

4.3. Luxury Cars

4.4. Executive Cars

4.5. SUVs

4.6. MUVs

5. AUSTRALIA CAR RENTAL MARKET BY MODE OF BOOKING

5.1. Introduction

5.2. Online

5.3. Offline

6. AUSTRALIA CAR RENTAL MARKET BY RENTAL CATEGORIES

6.1. Introduction

6.2. Local Transport

6.3. Airport Transport

6.4. Outstation Transport

6.5. Others

7. COMPETITIVE ENVIRONMENT AND ANALYSIS

7.1. Major Players and Strategy Analysis

7.2. Emerging Players and Market Lucrativeness

7.3. Mergers, Acquisitions, Agreements, and Collaborations

7.4. Competitive Dashboard

8. COMPANY PROFILES

8.1. Hertz

8.2. Europcar

8.3. Avis

8.4. Sixt

8.5. East Coast Car Rental

8.6. Turo

8.7. Enterprise Rent-A-Car

8.8. Alamo

8.9. Dollar Car Rental

8.10. Thrifty Car Rental

Hertz

Europcar

Avis

Sixt

East Coast Car Rental

Turo

Enterprise Rent-A-Car

Alamo

Dollar Car Rental

Thrifty Car Rental