Saudi Arabia Car Rental and Leasing Market Report and Forecast 2024-2032

Saudi Arabia Car Rental and Leasing Market Report and Forecast 2024-2032

Market Outlook

According to the report by Expert Market Research (EMR), the Saudi Arabia car rental and leasing market size reached approximately USD 2.52 billion in 2023. Aided by the rising demand for eco-friendly and energy-efficient vehicles, the market is projected to grow at a CAGR of 9.20% between 2024 and 2032, reaching a value of around USD 5.59 billion by 2032.

Car rental and leasing refer to the service of renting or leasing cars for short or long periods, ranging from a few hours to several years, without the direct ownership of the vehicle. This service caters to both individual customers and corporate clients, providing them with flexibility, cost efficiency, and a wide choice of vehicles without the burdens of ownership such as maintenance and depreciation.

The Saudi Arabia car rental and leasing market has been witnessing notable growth, influenced by various economic and social developments within the kingdom. This growth is underpinned by several factors, including economic diversification, increased tourism, and regulatory changes.

One of the primary drivers for the Saudi Arabia car rental and leasing market is the economic diversification efforts under Saudi Vision 2030. As the kingdom reduces its dependence on oil revenues, there has been significant investment in non-oil sectors such as tourism, entertainment, and public infrastructure. The launch of new tourist destinations and the relaxation of visa regulations have led to a surge in both domestic and international tourism, subsequently boosting the demand for car rental services. Additionally, major events like the Dakar Rally and the Riyadh Season have further spurred the market growth, necessitating robust transportation solutions for visitors.

Another significant Saudi Arabia car rental and leasing market trend is the increasing acceptance of leasing vehicles over buying. This shift is particularly evident among corporate clients who prefer leasing for its cost-effectiveness and convenience. Leasing companies offer various services, including fleet management and maintenance services, which are attractive to businesses looking to reduce operational complexities and overheads. The move towards operational expenditure rather than capital expenditure among businesses further drives this trend.

The introduction of women drivers in 2018 has also expanded the customer base for car rentals and leases. This historic change has not only increased mobility for women but has also opened up new market segments for service providers. Companies have been quick to capitalise on this demographic, offering tailored services and marketing strategies to attract female customers.

Technological advancements are profoundly reshaping Saudi Arabia car rental and leasing market growth. Digital platforms and smartphone apps have made car rental services more accessible and user-friendly. Customers can now browse vehicles, compare prices, book rentals, and even unlock cars using their mobile phones, enhancing customer experience and operational efficiency. Moreover, the integration of telematics and GPS tracking technologies helps companies monitor their fleets in real-time, improving vehicle utilisation and maintenance schedules.

Sustainability trends are also influencing the Saudi Arabia car rental and leasing market value, with an increasing number of rental and leasing companies including electric vehicles (EVs) in their fleets. This shift is supported by the Saudi government's push for environmental sustainability and the introduction of EV infrastructure across major cities. As the public becomes more environmentally conscious, the demand for eco-friendly transportation options is likely to grow, positioning EV rentals and leases as a growing niche within the Saudi Arabia car rental and leasing market.

Challenges remain, however, particularly in the form of economic fluctuations which can affect business and consumer confidence, impacting the car rental and leasing market in Saudi Arabia. Additionally, the high competition in the market presses margins and necessitates continuous service enhancements and marketing efforts to retain customer interest and loyalty.

Market Segmentation

The Saudi Arabia car rental and leasing market can be divided based on type, propulsion, vehicle type, mode, and end use.

Market Breakup by Type

• Car Rental
• Car Leasing

Market Breakup by Propulsion

• ICE
• Electric

Market Breakup by Vehicle Type

• Hatchback
• Sedan
• Multi-Utility Vehicle and Sports Utility Vehicle

Market Breakup by Mode

• Online
• Offline

Market Breakup by End Use

• Individual
• Corporation

Competitive Landscape

The EMR report looks into the market shares, plant turnarounds, capacities, investments, and mergers and acquisitions, among other major developments, of the leading companies operating in the Saudi Arabia car rental and leasing market. Some of the major players explored in the report by Expert Market Research are as follows:

• The Hertz Corporation
• Avis Budget Group, Inc.
• SIXT SE
• Hanco (Al Tala’a International Transportation Co. Limited)
• Key Car Rental Company
• Enterprise Holdings, Inc. (National Car Rental)
• Yelo (Alwefaq Transportation Solutions)
• Bin Hadi
• Europcar International S.A.S.U
• Samara (Alturki holding)
• Others

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*We at Expert Market Research always strive to provide you with the latest information. The numbers in the article are only indicative and may be different from the actual report.