Japan Car Rental Market Overview

Market Size in 2024: USD 2.8 Million

Market Forecast in 2033: USD 5.7 Million

Market Growth Rate 2025-2033: 8.1%

According to IMARC Group's latest research publication, "Japan Car Rental Market Report by Booking Type, Rental Length, Vehicle Type, Application, End-User, and Region 2025-2033," the Japan car rental market size reached USD 2.8 Million in 2024. IMARC Group expects the market to reach USD 5.7 Million by 2033, exhibiting a growth rate (CAGR) of 8.1% during 2025-2033. The market is propelled by a thriving tourism sector, increasing demand for flexible mobility, advancements in digital booking platforms, and the growing adoption of eco-friendly vehicles.

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Growth Factors in the Japan Car Rental Market

Thriving Tourism Sector

Japan’s tourism boom, with 33.1 million inbound and 273 million domestic travelers in 2023, significantly drives demand. In 2024, the Kanto Region saw a 15% surge in leisure-related rentals, with a projected CAGR of 8.3%, fueled by events like the Osaka Expo 2025, particularly impacting the Kansai Region.

Demand for Flexible Mobility

High vehicle ownership costs (e.g., parking fees averaging USD 200/month in Tokyo) push consumers toward rentals. In 2024, urban areas in the Kanto and Kinki Regions reported a 12% increase in rentals among non-car owners, supporting a CAGR of 8.2%. This aligns with Japan’s shift toward shared mobility.

Advancements in Digital Booking Platforms

Digital platforms like Rakuten Travel and Toyota’s Booking Car enhance accessibility. In 2024, online bookings in the Chubu Region grew by 18%, with a projected CAGR of 8.5%. Features like real-time availability and mobile apps drive consumer convenience.

Eco-Friendly Vehicle Adoption

Growing environmental awareness and government incentives for green mobility boost electric vehicle (EV) rentals. In 2024, EV rentals in the Kyushu-Okinawa Region rose by 14%, with a projected CAGR of 8.4%. Companies like Nissan are expanding hybrid and EV fleets to meet demand.

Key Trends in the Japan Car Rental Market

Online Booking Leads

Online booking accounted for 60% of the market share in 2024, driven by platforms like Nippon Rentacar and Orix Rentacar. In the Hokkaido Region, online bookings surged by 20%, with a CAGR of 8.7%. Offline bookings grow slower at a CAGR of 7.5%.

Short-Term Rentals Dominate