CarTrawler, a travel-technology platform and online aggregator of car rental and ground transportation services, has analyzed the car rental business in four European destination markets — Germany, Spain, France and the United Kingdom — as well as the United States to provide insight into the recent car rental market.

CarTrawler analyzed daily car rental rates and rental duration data over a three-year period spanning 2012 to 2014.

CarTrawler’s key finding was that the U.S. had the most stable car rental market among the group analyzed, with an average growth rate in rental durations of 1.2% in the three-year period. Car rental pricing remained consistent across the three-year period.

In gathering pricing data, CarTrawler looked at all rates available in each market and the data reveals a 2% year-over-year increase in U.S. pricing from 2012 to 2013 but zero percent change between 2013 and 2014.

In Europe, rental durations have remained relatively stable during this period as well, but prices have decreased across all four of the markets. By analyzing all prices available in the marketplace during the three-year period, CarTrawler’s data shows that Germany experienced the biggest aggregate percentage decrease in pricing (19%), followed by Spain (13%), France (11%) and the U.K. (6%).

What are the main reasons for this apparent price pressure in Europe and how is the U.S. escaping? CarTrawler reviewed the market forces at play to find an explanation behind the trend.

Increased Competition

In Europe, there has been a noticeable emergence and growth of value-priced car rental suppliers. For instance, Enterprise took back control of Alamo from Europcar, Hertz is expanding Dollar and Thrifty in Europe, and new value brands such as Interrent, Firefly (owned by Hertz) and Keddy (owned by Europcar) have entered the market; they continue to gain market share.

The strongest growth figures for this trend have been experienced in Spain, which has witnessed the establishment of value brands such as Goldcar, Centauro, Atesa and Firefly in the last few years. CarTrawler data reveals that value brands have grown their share of the Spanish market from 48% in 2012 to 62% in 2014.

In France, value brand offerings have grown from zero in 2012 to almost a quarter of all CarTrawler bookings by 2014. And the March 2015 launch of Europcar’s new Keddy brand signals that this trend is set to continue, as it is backed by a strong brand in the market.

The composition of the U.K. value-brand market is very strong and stood at 63% of all destination U.K. car bookings by the end of 2014, reflecting a 5% growth in the three-year period analyzed.

Larger operators like Enterprise have become multi-brand umbrella companies, differentiating themselves with product offerings for price-sensitive leisure customers who want the benefits of big brand expertise and service at low prices. Their success in entering and achieving full coverage in Europe within a few years has been significant.

However, there are some exceptions to the value-brand phenomenon — namely, the U.S., where car rental is very competitive across the board and customers tend to be extremely loyal to bigger and more established brands. This is also the case in Germany, an extremely robust market, with customers choosing premium brands over value-priced car rental suppliers.

Vehicle Type Changes

According to the most recent annual report from Ford Motor Company, it is expected that increased demand for smaller, more fuel-efficient vehicles will continue in mature markets such as Europe and the U.S.

This trend is backed up by CarTrawler data that shows the demand for smaller cars has increased by an average of 23% across all markets analyzed and demand for larger cars (bigger than economy or compact) has fallen by an average of 18% in the same three-year time frame. This is a trend likely to impact average daily rates across the countries surveyed.

Taking a closer look at the data, Germany experienced the biggest uptake in demand for the small car category with a 38% increase. France registered a 32% increase in small car bookings, followed by Spain (24%) and the U.K. (17%).

Again, we see the U.S. defying this trend, with a 56% increase in bookings for premium cars. This is indicative of popular vehicle types available in the U.S. and extremely competitive pricing.

Overall Outlook

Customers across all markets are demanding an increasingly personalized rental experience and the differences between countries can indeed be remarkable. However, choice isn’t just about quantity or price; it’s also about relevance to the customer.

Using data science, CarTrawler has the power to anticipate changes in customer behavior to use our technology to provide them with a more personalized service.

To this end, CarTrawler anticipates the need for a more comprehensive range of ground transportation solutions that can be personalized by customer, by country and by continent. The company has plans for significant expansion of this portfolio in 2015.