Opening a luxury car rental agency: a niche market

According to a recent American study, the global luxury car rental market should represent more than 35 billion euros by 2025. A niche market with high potential dominated by a few large 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 luxury car rental market reached 16 billion in 2019 and, according to analyzes by several specialized American research firms, should reach 22.5 billion in 2022 and even almost 35 billion in 2025.

But what the same studies reveal is that the US alone represents more than 50% of this significant and growing market. Europe accounts for only 29% of these colossal amounts. If no precise data is shown for France, one can therefore easily imagine that luxury car rental only represents a few hundred million euros in revenue, at most 1 billion. What exactly makes one Niche market limited.

It is undoubtedly 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 made from business lettings and “traditional” private lettings.

Therefore, if you want get started with luxury car rentalseems to be the most suitable solutionopen a car rental company “traditional” and to carry out a local market survey to check the relevance of integrating in 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 concerns long-term rental of high-end vehicles for business managers. A winning approach that enables 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.

Selling luxury cars: a successful alternative

In the luxury car segment, another activity appears to be an excellent alternative to leasing: sale of used luxury or collector cars.

Although the market experienced some upheaval at the end of 2020 in England, particularly due to the health crisis, it is generally performing well and should benefit from the steady 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, France registered almost 310,000 new millionaires. And this after growth of 11% in 2019.

A niche market, of course, the used luxury or collector car market is therefore driven in France by a 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 itself out of the game: Carslift. Originally specializing in direct imports of used German cars, the brand quickly developed into the high-end used car market to create two specialist brands:

  • Carslift Prestige, specializing in luxury cars;
  • Carslift Retro, specializing in vintage cars.

The two brands therefore benefit from the expertise of the group created in 2012, its efficient 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 in 6 to 8 months for a turnover (consisting exclusively of commissions on sales) 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.

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