According to a recent US study, the global luxury car rental market should represent more than 35 billion euros by 2025. A high-potential niche market dominated by a few major players. At the same time, a used luxury car market is also developing. Opening a luxury car rental agency: the point of the question.
Luxury car rental: a complementary niche market
While it only represented € 10 billion worldwide in 2016, the market for the rental of luxury cars reached 16 billion in 2019 and should, according to analyzes by several specialized US research firms, 22.5 billion in 2022 and even almost 35 billion in 2025.
But what the same studies reveal is that the United States alone represents more than 50% of this significant and growing market. Europe accounts for only 29% of these colossal amounts. Therefore, if no accurate data is shown for France, one can easily imagine that luxury car rental only represents a few hundred million euros in turnover, maximum 1 billion. What really makes it one Niche market limited.
It is without a doubt for this reason that this market segment has been monopolized by major car rental brands (Hertz, Avis, Enterprise), which owns 75% of the shares. For these general brands, luxury car rental is one additional source of income ; The majority of the turnover is on business rentals and “traditional” private rentals.
Therefore, if you will get started with luxury car rentalseems to be the most suitable solutionopen a car rental company “traditional” and to conduct a local market research to check the relevance of integrating into your offer a fleet of luxury cars.
In this logic, one brand stands out: Simplicillease. Created by the brand that originally specialized in the sale of new and used vehicles Simplicicar, this brand specializes in long term rentals, especially for professionals. Therefore, one of its specialties relates long-term rental of high-end vehicles for business leaders. A winning approach that allows the brand’s franchisees to achieve, for a contribution of only € 20,000, an average turnover of € 1.8 million after two years of activity.
Luxury car sales: a successful alternative
In the luxury car segment, another activity seems to be an excellent alternative to leasing: sale of used luxury or collector cars.
Although the market experienced some upheavals in late 2020 in the UK, particularly due to the health crisis, it is generally doing well and should benefit from the constant increase in the number of millionaires in France in the coming years. In fact, as a reminder, in 2020, when the country was hit hard by a recession caused by the Covid-19 pandemic, nearly 310,000 new millionaires registered. And this after a growth of 11% in 2019.
A niche market, of course, the market for used luxury or collector cars is therefore run in France by one constant growth in the number of customers can afford these particular kinds of passion purchases.
But in this segment, one brand has managed to pull out of the game: Carslift. The brand, which originally specialized in direct imports of used German cars, quickly developed in the market for advanced used cars to create two specialized brands:
- Carslift Prestige, specializing in luxury cars;
- Carslift Retro, specializing in vintage cars.
The two brands therefore benefit from the expertise of the group set up in 2012, its effective financial model and its management and sales methods. The whole concept makes it possible, with a negative WCR from the first years (thanks to lack of stock), to reach the break-even point of 6 to 8 months for a turnover (consisting exclusively of commission on sale) from € 300,000 to € 380,000 on average after two years of activity. And this for average financial flows of 2.5 to 3 million euros per year.
So if you are attracted to luxury car rental, you can also consider selling the same vehicles, used, with franchise companies that have developed their brand around this promising concept.