Australia Car Rental Market Size, Trends & Growth (2025–2034)

The Australian car rental market has been a vital component of the country's transportation sector, driven by tourism, business travel, and an increasing shift towards more flexible and sustainable mobility solutions. With the market valued at USD 3.62 billion in 2024, it is expected to grow at a CAGR of 2.20% from 2025 to 2034, reaching USD 4.50 billion by 2034. The rise in disposable incomes, the popularity of road trips, and the surge in tourism both from domestic and international travelers are among the key factors fueling the market’s growth.

Australia Car Rental Market Size

The car rental market in Australia stood at USD 3.62 billion in 2024. As tourism continues to rebound, coupled with increasing business travel, the market size is projected to grow steadily. By 2034, the market is expected to expand to USD 4.50 billion, supported by the continued demand for short-term and long-term rentals. This growth can be attributed to several factors, including the rise in consumer preference for renting vehicles instead of owning them and the expansion of the tourism industry across major Australian cities and attractions.

Australia Car Rental Market Trends

• Adoption of Electric Vehicles (EVs): A growing trend within the Australian car rental market is the shift towards electric vehicles. Companies are increasingly adding EVs and hybrid models to their fleets to cater to environmentally conscious customers and align with sustainability goals.

• Digital Transformation: The increasing reliance on online platforms and mobile apps for booking and managing rentals is another key trend in the industry. Consumers are demanding seamless, hassle-free booking experiences, and rental companies are responding by integrating digital platforms that provide real-time availability, pricing, and convenient booking features.

• Rise in Car-Sharing Models: Platforms like Turo and GoGet have gained popularity, providing consumers with more flexible rental options that range from hourly rentals to long-term sharing, especially in urban areas. Car-sharing services have become an attractive alternative to traditional rentals, particularly for younger consumers and those who only need a vehicle occasionally.

Australia Car Rental Market Growth

The growth of the Australian car rental market is driven by several factors, including:

• Increase in Tourism and Business Travel: The continuous increase in inbound and domestic tourism is a major driver of growth in the car rental market. Popular tourist destinations across Australia such as the Great Barrier Reef, Sydney, Melbourne, and the Outback are all contributing to increased demand for rental vehicles.

• Changing Consumer Preferences: More Australians and tourists are opting for car rentals as a preferred means of transport, favoring the flexibility and convenience it offers over public transport or owning a vehicle. Additionally, businesses are utilizing car rentals for short-term use, including meetings, conferences, and corporate events.

• Technological Advancements: Innovations in the digital space, such as the widespread use of mobile apps and online reservation systems, have made car rentals more accessible and convenient for consumers. Additionally, the integration of technology in fleet management is enhancing operational efficiency, making it easier for rental companies to offer competitive pricing and seamless experiences.

Australia Car Rental Market Segmentation

Breakup by Booking Type

• Online Booking

• Offline Booking

Breakup by Vehicle Type

• Luxury/Premium Cars

• Economy/Budget Cars

• SUVs

• MUVs

Breakup by Application

• Leisure/Tourism

• Business

Australia Car Rental Market Forecast

The Australian car rental market is forecast to grow at a CAGR of 2.20% between 2025 and 2034. By 2034, it is expected to reach a market value of USD 4.50 billion. This growth is anticipated to be driven by the continued expansion of tourism and business travel, the increasing popularity of electric and hybrid vehicles, and advancements in digital solutions. As the demand for convenient and sustainable transport options grows, rental companies are likely to invest in modernizing their fleets and expanding their service offerings to meet evolving customer needs.

Competitive Analysis

Several key players dominate the Australian car rental market, with their offerings, fleets, and pricing strategies creating a highly competitive landscape. The top players include:

Budget Rent a Car System Inc.: Known for its wide range of vehicles and competitive pricing, catering to both leisure and business travelers. Their focus on value for money has helped them maintain a strong position in the Australian market.

Avis Rent a Car System LLC: Offers premium services and a diverse fleet, focusing on delivering high-quality customer experiences. The company’s strong brand presence and reputation for high-quality customer service make it a leader in the market.

The Hertz Corporation: Hertz has a strong presence in Australia, particularly in major cities and airports. They offer a broad selection of vehicles, from economy to luxury models, and cater to both tourists and business clients. Their focus on customer convenience and extensive network contributes to their competitive edge.

Europcar International S.A.S.U.: Europcar focuses on sustainability with a growing fleet of electric and hybrid vehicles. The company’s modern booking platform and commitment to customer satisfaction have made it a popular choice among Australian consumers looking for eco-friendly and convenient transportation options.

Alpha Car Hire Trading Pty Ltd.: Alpha Car Hire is a budget-friendly option that focuses on affordability and excellent customer service. The company offers competitive rates and a wide variety of rental options, making it an attractive choice for cost-conscious travelers.

Others: Apart from the major players, several smaller and local car rental companies also compete in the market. These players often focus on niche markets, offering specialized vehicles or flexible rental packages tailored to specific customer segments, such as long-term rentals for businesses or unique vehicles for tourists seeking out-of-the-ordinary experiences. The presence of these smaller players adds diversity and choice to the competitive landscape.