India Car Rental and leasing Market Outlook to 2035

The report titled “India Car Rental and Leasing Market Outlook to 2035 – By Rental Type, By Vehicle Type, By End-User Segment, By Contract Duration, By Booking Channel, and By Region” provides a comprehensive analysis of the car rental and leasing industry in India. The report covers an overview and genesis of the market, overall market size in terms of value, detailed market segmentation; trends and developments, regulatory and taxation landscape, buyer-level demand profiling, key issues and challenges, and competitive landscape including competition scenario, cross-comparison, opportunities and bottlenecks, and company profiling of major players in the India car rental and leasing market. The report concludes with future market projections based on urban mobility trends, corporate outsourcing of fleets, expansion of app-based mobility platforms, airport and tourism growth, EV adoption in shared mobility, regional demand drivers, cause-and-effect relationships, and case-based illustrations highlighting the major opportunities and cautions shaping the market through 2035.

India Car Rental and Leasing Market Overview and Size

The India car rental and leasing market is valued at approximately ~INR ~ billion, representing the organized and semi-organized provision of passenger vehicles offered on short-term rental, long-term lease, and subscription-based models. The market includes chauffeur-driven and self-drive rentals, corporate fleet leasing, airport transfers, outstation travel, and emerging flexible ownership and subscription formats catering to both individual and institutional customers.

The market is anchored by India’s rapid urbanization, growing white-collar workforce, increasing corporate mobility outsourcing, expansion of domestic tourism, and the rising preference for access-based mobility over vehicle ownership in large cities. Car rental and leasing services benefit from predictable operating costs, reduced ownership burden, flexibility in fleet sizing, and professional fleet management—making them increasingly attractive to enterprises, travel platforms, and urban consumers.

Metro cities such as Delhi NCR, Mumbai, Bengaluru, Chennai, Hyderabad, and Pune represent the largest demand centers, driven by corporate offices, airports, IT/ITeS hubs, and business travel. Tier-1 cities dominate organized self-drive and app-based rentals, while Tier-2 and Tier-3 cities show rising demand for chauffeur-driven rentals, pilgrimage travel, and intercity movement. Tourist-heavy states and airport-led clusters contribute significantly to short-duration rentals, while long-term leasing demand is concentrated in corporate and institutional procurement hubs.

What Factors are Leading to the Growth of the India Car Rental and Leasing Market:

Expansion of corporate fleet outsourcing and employee mobility programs strengthens long-term leasing demand: Indian enterprises across IT services, consulting, BFSI, pharmaceuticals, and manufacturing are increasingly outsourcing employee transportation and executive mobility to professional fleet operators. Long-term leasing and managed mobility solutions allow companies to convert capital expenditure into operating expenditure, standardize vehicle policies, ensure compliance, and reduce administrative overhead. Fleet leasing providers offer bundled services including maintenance, insurance, driver management, telematics, and replacement vehicles, making them integral partners in corporate mobility strategies. This structural shift continues to expand the organized leasing segment across metro and non-metro locations.

Growth of domestic tourism, air travel, and app-based mobility platforms accelerates short-term rentals: India’s rising domestic tourism, increased air passenger traffic, and proliferation of digital travel platforms have significantly boosted demand for short-term car rentals. Airport transfers, outstation travel, weekend tourism, and intercity business movement increasingly rely on rental vehicles for convenience and reliability. App-based aggregators and self-drive platforms have improved price transparency, booking ease, and vehicle availability, expanding the addressable customer base beyond traditional travel agents and hotels. This digitalization of demand has strengthened fleet utilization and encouraged professionalization of rental operations.

Changing urban mobility preferences and high cost of vehicle ownership support access-based models: In major Indian cities, increasing congestion, parking constraints, high upfront vehicle costs, and evolving lifestyle preferences are reducing the appeal of personal car ownership—especially among younger professionals. Flexible rental, subscription, and short-term leasing models allow users to access vehicles without long-term financial commitment or asset risk. This shift is further reinforced by rising awareness of total cost of ownership, regulatory compliance requirements, and the convenience of bundled mobility solutions. As a result, access-based car usage is gaining acceptance as a practical alternative to ownership, particularly in urban India.

Which Industry Challenges Have Impacted the Growth of the India Car Rental and Leasing Market:

High vehicle acquisition costs and residual value uncertainty impact fleet expansion and pricing stability: Car rental and leasing operators in India remain highly sensitive to vehicle acquisition costs, which are influenced by OEM pricing revisions, changes in taxation, and increasing costs associated with safety, emission, and connectivity features. Rising upfront vehicle prices directly affect fleet expansion decisions, lease pricing, and return on invested capital. In addition, uncertainty around residual values—driven by regulatory changes, shifting consumer preferences, and growing EV penetration—creates risk in long-term leasing and subscription models. These dynamics can constrain aggressive fleet growth and lead operators to adopt conservative replacement cycles or shorter contract tenures.

Driver availability, retention, and compliance requirements create operational bottlenecks: Chauffeur-driven rental and corporate mobility segments rely heavily on trained and compliant drivers, making driver availability and retention a persistent challenge. Operators face rising costs related to driver wages, background verification, training, statutory compliance, and attrition management—particularly in metro and airport-centric operations with high service-level expectations. Inconsistent driver supply can affect service quality, fleet utilization, and customer satisfaction, especially during peak travel seasons or large corporate onboarding phases. These operational constraints can limit scalability and introduce variability in service outcomes across cities and operators.

Fragmented regulatory environment and state-level compliance increase administrative complexity: The Indian car rental and leasing market operates within a fragmented regulatory framework spanning central motor vehicle rules, state transport regulations, local permit requirements, and taxation regimes. Differences in road tax structures, commercial vehicle registration norms, inter-state permit rules, and enforcement practices increase administrative overhead for operators managing multi-city fleets. Frequent changes in compliance interpretation, documentation requirements, and enforcement intensity can delay vehicle onboarding, restrict inter-state operations, and increase compliance risk—particularly for pan-India fleet operators and app-based mobility platforms.

What are the Regulations and Initiatives which have Governed the Market:

Motor vehicle regulations and commercial vehicle compliance governing fleet operations and safety: Car rental and leasing vehicles in India must comply with central and state-level motor vehicle regulations governing vehicle registration, commercial permits, fitness certification, insurance coverage, and safety standards. Requirements related to commercial number plates, periodic inspections, driver licensing, and passenger safety directly influence fleet configuration and operating costs. Enforcement intensity varies by state and city, requiring operators to maintain robust compliance management systems and standardized operating procedures to ensure uninterrupted service delivery.

Taxation structure, GST applicability, and input credit rules shaping pricing and business models: The applicability of Goods and Services Tax (GST) on car rental and leasing services affects customer pricing, contract structuring, and operator margins. Differences in GST rates across rental categories, eligibility of input tax credit, and treatment of bundled services such as drivers, fuel, and maintenance influence commercial models. For corporate leasing and long-term contracts, tax treatment plays a critical role in determining demand, contract tenure, and preference for leasing versus ownership. Operators must continuously adapt pricing structures to remain competitive while ensuring tax compliance.

Government initiatives promoting shared mobility and EV adoption influencing fleet strategy: Policy initiatives aimed at reducing urban congestion, improving air quality, and accelerating electric vehicle adoption indirectly shape the car rental and leasing market. Incentives for EVs, support for charging infrastructure, and state-level mobility policies encourage fleet operators to pilot electric vehicles in shared and corporate mobility applications. While EV adoption introduces new cost and utilization considerations, regulatory support and long-term sustainability goals are prompting operators to gradually integrate EVs into their fleets, particularly in high-density urban and airport-centric use cases.

India Car Rental and Leasing Market Segmentation

By Rental Type: The chauffeur-driven rental and long-term leasing segment holds dominance in the India car rental and leasing market. This is because corporate mobility programs, airport transfers, intercity business travel, and institutional contracts continue to rely heavily on professionally managed, chauffeur-driven fleets. Enterprises and government-linked organizations prioritize reliability, compliance, and service continuity, which favors organized operators with large fleets and driver management capabilities. While self-drive rentals and subscription-based models are growing—especially among urban millennials—the chauffeur-driven and lease-based segments continue to benefit from predictable volumes, long-term contracts, and repeat corporate demand.

Chauffeur-driven Rentals (Corporate, Airport, Intercity)  ~45 %
Long-term Corporate Leasing & Fleet Management  ~30 %
Self-drive Rentals (Short-term, App-based)  ~15 %
Subscription & Flexible Ownership Models  ~10 %

By End-User Segment: Corporate and institutional users dominate the India car rental and leasing market. Enterprises across IT/ITeS, BFSI, consulting, manufacturing, pharmaceuticals, and government-linked entities increasingly outsource employee transportation, executive mobility, and visitor travel to professional fleet operators. These buyers value compliance assurance, service-level agreements, nationwide coverage, and cost predictability. Individual and tourism-driven demand continues to expand, particularly in airport-centric and leisure-heavy regions, but remains more fragmented and price-sensitive compared to corporate demand.

Corporate & Institutional  ~55 %
Individual / Leisure & Tourism  ~30 %
Government & Public Sector  ~10 %
SME & Others  ~5 %

Competitive Landscape in India Car Rental and Leasing Market

The India car rental and leasing market exhibits moderate-to-high fragmentation, characterized by a mix of large organized fleet operators, corporate-focused leasing specialists, app-based mobility platforms, and a long tail of regional and local operators. Market leadership is driven by fleet scale, geographic coverage, corporate client relationships, compliance capabilities, driver management systems, and technology-enabled booking and fleet tracking. While national players dominate corporate leasing, airport transfers, and multi-city contracts, regional operators remain competitive in local travel, pilgrimage routes, and Tier-2/Tier-3 city demand due to cost efficiency and localized service networks.

Some of the Recent Competitor Trends and Key Information About Competitors Include:

Orix India: Orix India continues to strengthen its position in the corporate leasing and fleet management segment, focusing on long-term contracts, bundled services, and enterprise mobility solutions. Its competitive advantage lies in strong OEM relationships, disciplined fleet replacement strategies, and deep integration with corporate procurement and HR mobility programs.

Avis India: Avis India remains a prominent player in chauffeur-driven rentals and corporate travel services, leveraging global brand affiliation, standardized service protocols, and airport-centric operations. The company competes strongly in executive mobility, MICE travel, and multinational corporate accounts where brand assurance and service consistency are critical.

Zoomcar: Zoomcar has played a key role in popularizing the self-drive rental model in India, targeting urban professionals and leisure travelers seeking flexible, short-duration access to vehicles. While the segment faces utilization and asset management challenges, Zoomcar’s technology platform, city presence, and brand recognition continue to support demand growth in metros.

Savaari Car Rentals: Savaari has built a strong intercity and outstation rental network, competing on wide geographic coverage, predictable pricing, and reliability across long-distance routes. The company benefits from growing domestic tourism and intercity business travel, particularly in Tier-2 and pilgrimage-heavy corridors.

Myles: Myles focuses on corporate self-drive and subscription-based offerings, positioning itself as a flexible mobility alternative for enterprises and long-term users. Its strength lies in B2B partnerships, airport deployments, and structured subscription plans that appeal to users seeking ownership-lite mobility solutions.

What Lies Ahead for India Car Rental and Leasing Market?

The India car rental and leasing market is expected to expand steadily through 2035, supported by long-term urbanization trends, rising corporate outsourcing of mobility, sustained growth in domestic air travel and tourism, and evolving consumer preference for access-based transportation over ownership. Growth momentum is further reinforced by increasing congestion and parking constraints in large cities, formalization of corporate travel policies, and the gradual integration of technology-driven fleet management and booking platforms. As enterprises and urban consumers increasingly prioritize flexibility, predictable costs, and professionally managed mobility solutions, car rental and leasing will remain a critical component of India’s evolving transportation ecosystem.

Transition Toward Structured Corporate Mobility and Managed Fleet Programs: The future of the India car rental and leasing market will see a continued shift from ad-hoc travel arrangements toward structured, contract-driven corporate mobility programs. Enterprises are increasingly standardizing employee transportation, executive travel, and visitor mobility under centralized procurement frameworks with defined service levels, compliance requirements, and reporting mechanisms. Long-term leasing and managed fleet solutions will gain prominence as companies seek cost predictability, administrative simplicity, and nationwide coverage. Operators with strong corporate relationships, compliance infrastructure, and scalable fleet management capabilities will capture a growing share of institutional demand.

Growing Role of Technology Platforms and Data-Driven Fleet Optimization: Digital platforms will play an increasingly central role in shaping demand, pricing, and operational efficiency across the car rental and leasing market. App-based booking, GPS-enabled fleet tracking, telematics, and data-driven utilization optimization will improve vehicle uptime and customer experience. Corporate clients will increasingly expect dashboards, usage analytics, billing transparency, and compliance reporting as part of mobility contracts. Operators that invest in integrated technology stacks—covering booking, dispatch, driver management, and maintenance—will improve scalability and reduce operational variability across cities.

Gradual Integration of Electric Vehicles and Sustainability Narratives into Fleets: Through 2035, electric vehicles will gradually become part of rental and leasing fleets, particularly in airport transfers, corporate commuting, and urban point-to-point travel. Government incentives, expanding charging infrastructure, and corporate sustainability commitments will support this transition. While EV adoption introduces challenges related to charging downtime, residual values, and route planning, it also offers lower operating costs and alignment with environmental objectives. Fleet operators that selectively deploy EVs in high-utilization, predictable-use cases will be better positioned to capture early advantages without compromising service reliability.

Expansion Beyond Metros into Tier-2 and Tier-3 Cities Driven by Tourism and Regional Business Growth: While metro cities will continue to dominate demand, meaningful growth through 2035 will come from Tier-2 and Tier-3 cities driven by regional business expansion, improved air connectivity, pilgrimage tourism, and domestic travel. Demand in these markets will remain skewed toward chauffeur-driven rentals and intercity travel, with localized operators playing an important role. National players with hub-and-spoke models, regional partnerships, and flexible fleet deployment strategies will be able to extend their footprint while managing cost efficiency.

India Car Rental and Leasing Market Segmentation

By Rental Type

• Chauffeur-driven Rentals (Corporate, Airport, Intercity)
• Long-term Corporate Leasing & Fleet Management
• Self-drive Rentals
• Subscription & Flexible Ownership Models

By Vehicle Type

• Hatchbacks
• Sedans
• SUVs & MUVs
• Luxury & Premium Vehicles

By Contract Duration

• Short-term Rentals (Hourly / Daily)
• Medium-term Rentals (Weekly / Monthly)
• Long-term Leasing (12–60 months)

By Booking Channel

• Corporate Contracts
• App-based / Online Platforms
• Travel Agents & Tour Operators
• Direct / Offline Bookings

By End-User Segment

• Corporate & Institutional
• Individual / Leisure & Tourism
• Government & Public Sector
• SMEs & Others

By Region

• North India
• West India
• South India
• East India
• Central India

Players Mentioned in the Report:

• Avis India
• Orix India
• Savaari Car Rentals
• Zoomcar
• Myles
• Meru Cabs
• Ola Fleet Services
• Regional car rental operators, corporate transport aggregators, and fleet management service providers

Key Target Audience

• Car rental and fleet leasing companies
• Corporate mobility and facility management teams
• Travel management companies and aggregators
• Airports, hotels, and tourism infrastructure operators
• OEMs and automotive finance companies
• Electric vehicle manufacturers and charging infrastructure providers
• Urban mobility planners and transport consultants
• Private equity and mobility-focused investors

Time Period:

Historical Period: 2019–2024
Base Year: 2025
Forecast Period: 2025–2035