Strong penetration of the internet and Smartphone, growth in demand for online booking and expansion of fleet size of major players in the industry have been major growth drivers of Romania car rental market during the review period.
Car rental industry in Romania is highly concentrated, with the top three brands accounting for a combined 72% value share and a 71% share of transactions during 2017. The market of online bookings was aided by the strong penetration of Smartphone and apps that facilitated rapid access to car rental. Online intermediaries and airlines also included car rental in their services, which further contributed to the dynamics of online sales. The car rental companies have been tying up with airline companies and airports to increase their visibility and reach. Strong penetration of the internet and Smartphone in the large majority of households supported the rapid growth of online sales for all industries. Witnessing the market shift, companies operating in car rental market shifted from the traditional business models to online based models. The companies have been developing mobile based platforms for the convenience of the customers; however the most-used online method remained companies’ websites, which provided all the required information to choose a car rental service.
The companies in the car rental market have been competing on the basis of price and availability of cars. It is observed that major companies have car leasing in their portfolios, but New Kopel Romania has dominated this segment based on its activities as a car dealer. The companies in Romania car rental market are focused on mass transactions and they don’t target any particular customer group. The main obstruction to the development of car rental towards its potential is the poor condition of the roads in the country. Irrespective of major obstructions in the market, car rental in Romania witnessed growth owing to demand from foreign tourists and Romanians living and working abroad, who preferred to rent a car while visiting Romania. It was observed that strong development of low cost carriers augmented the growth of car rental due to lower overall transportation costs.
The report titled “Romania Car Rental Market by Market Structure (Organized and Unorganized Sector), by Mode of Booking (Online and Offline), by Clients (Leisure and Business), by Pick-Ups (Airport and Off-Airport), by Car Type (Hatchback, Sedan and SUV) and by Major Regions – Outlook to 2022” by Ken Research suggested that increasing preference of car rental over public transport and continued economic growth of the country will majorly account for the overall revenue growth of Romania car rental market in next 5 years till 2022.
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Ankur Gupta, Head Marketing