Car Rental Demand in Bric Essays

Car Rental Demand in Bric Essays Car Rental Demand in Bric Essay Car Rental Demand in Bric Essay During the review period, the leisure tourist car rental market in China registered the highest growth with a CAGR of 31. 94%, followed by India with a CAGR of 21. 83%. Brazil and Russia recorded CAGRs of 10. 24% and 11. 52% respectively. Over the forecast period, the leisure care rental markets in India, Russia and Brazil are expected to grow more quickly than Chinas. A BRICData, which studies Brazil, Russia, India and China (BRIC), released a 2012 study looking at the four regions focusing on â€Å"Market Entry Strategies and Emerging Opportunities in the Car Rental Industry in BRIC,† as the study was titled. According to the report, the four countries make up slightly less than half of the world’s total population. At a total compound annual growth rate (CAGR) of 20% over the past five years, the four countries are expected by BRICData to continue to grow at a CAGR from 2012-2016 of 13. 7% - reaching $17. 4 billion in 2016.The market size of BRIC hit $8. 9 billion i n 2011, according to the report. â€Å"Increasing GDP levels, high levels of personal disposable income, increasing volumes of both domestic and inbound tourists, and increasing levels of economic activity are the key driving forces behind the increased demand for the car rental industry in the BRIC nations,† the report states. Brazil The car rental market in Brazil is expected to grow in value from BRL5. 83 billion in 2012 to BRL7. 96 billion in 2016, attaining a CAGR of 8. 9% over the forecast period. Growth is expected to be driven by the hosting of international sports events such as the 2014 FIFA World Cup and the 2016 Olympic Games, increasing volumes of both leisure and business tourists. The industry is highly fragmented with more than 1,000 companies operating in the economy. Russia The Russian car rental industry has recorded considerable growth over the last few years, as the market size reached RUB2. 57 billion in 2011, an increase of 12. 7% from 2010. The mark et is expected to grow at a CAGR of 16. 5% during the forecast period to reach RUB4. 73 billion by 2016. Demand for rented cars in Russia comes primarily from international tourists, visiting the country either for leisure or business purposes. Demand is expected to increase significantly in line with tourist volumes. The Russian car rental industry is expected to remain highly competitive and fragmented, with large numbers of both local and international operators offering a variety of services at competitive rates. India India’s car rental industry grew at a CAGR of 21. 95% over the review period.The market is primarily driven by increasing volumes of local and international tourists, and considerable investments in road infrastructure. The Indian car rental industry is primarily driven by the unorganized market; the organized car rental industry contributes just 3% of the overall rental fleet size. With the presence of a large number of small companies, the market is expected to consolidate as larger operators look to acquire smaller companies to improve their geographical reach. Demand for rented cars in India is driven by both domestic and international tourists.Business customers are the primary target market, with a total market size of INR81. 59 billion in 2011. China China’s car rental industry is one of the fastest-growing markets in all the BRIC nations, recording a CAGR of 32. 03% during 2007–2011. The market is expected to grow at a CAGR of 16. 10% during 2012–2016 to reach CNY54. 09 billion in 2016. The market’s growth will be driven by increased spending on travel by domestic tourists, urbanization rates, the high costs of owning and driving a car, and new government policies curbing private car usage. The Chinese car rental industry is highly fragmented, with more than 40,000 car rental companies operating across the country. The market is mainly unorganized as only 6,000 of these companies are officia lly registered, and 75% operate five cars or less. With the entry of foreign competitors, the sector is expected to register high levels of consolidation. | Looking at various key indicators for the car rental industry in the BRIC countries, China seems to excel across key parameters.However, Brazil leads China in terms of rental volume, while Russia leads in terms of the overall utilization rate. | | China is expected to lead the field in terms of future growth, while India is poised for significant growth with the highest rental volume and second-highest utilization rate. Brazil is expected to be a promising market for car rental companies, with forthcoming global sporting events which are likely to drive demand for rented cars. |