Singapore Car Rental Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Singapore Car Rental Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Singapore Car Rental Market is valued at USD 120.33 Million in 2021 and is expected to reach USD 192.36 Million by 2027 registering a CAGR of over 9.84% during the forecast period, 2022-2027.

The demand for rental cars fell by almost 90% during the start of the COVID-19 outbreak, and vendors rushed to find cost-saving measures. Demand is already surpassing availability as more people resume travelling and vaccine distribution, which could result in the growth of car rental market . Due to pandemic caused havoc, the challenge for car rental companies was to find quick ways to cut costs and overhead. All companies were compelled to consider options during the early stages of the pandemic, including employee layoffs, closing rental outlets, and drastic fleet size reductions. The low demand for secondhand cars made it extremely difficult to remain profitable, which further exacerbated the situation. As the situation is recovering back to normalcy from Q2 2021, the car rental market is expected to gain traction during the coming years.

Over the long term, , the market is anticipated to exhibit significant expansion due to the factors like the rising cost of owning and maintaining a car which is helping the market. Favorable government initiatives will also increase the nation's market for car rentals.

The demand for car rentals is being driven by the retail sector. In Singapore, customers anticipate similar experiences with other services as well. Also, the rental car sector is undergoing a big shift or disruption as customers are looking for seamless applications, speed and service.

Key Market TrendsRising Car Prices is Boosting the Market Growth

The cost of owning and maintaining a car is increasing in Singapore, and as a result, there is a growing need for more affordable ways to drive an own vehicle. The availability of cars in the nation has changed significantly as a result of the popularity of car-hailing mobile app services.

In the first three months of 2022, 20.9% of all newly registered cars here were for private hire, an increase from 12.0% during the same period in 2021. The rise in private usage rentals—whether for longer leases that substitute for car purchases or for car-sharing services was the primary factor behind this rise.

The government of Singapore uses a number of quotas and fees to limit traffic growth. These measures have the potential to increase a car's on-road cost to five times its wholesale price in the place of manufacture. The Certificate of Entitlement, which is determined in a twice-monthly auction, carries the highest fee. For ten years, the COE grants permission to operate a car in Singapore. Once it runs out, you must either export the vehicle, junk it, or get a new COE.

Government Initiatives Propelling the Market

Due to the government's regulation of the rental car industry and pricing leadership, which benefits both consumers and service providers, Singapore's car rental market structure is a market dominated by a small number of players. Regardless of the company's market share, the cost of the services remains the same. The introduction of different types of car rental services in Singapore allows clients to select their preferred taxis. Additionally, the government has lessened the likelihood of a monopoly and encourages the players to offer reasonable services. Car rental providers are beginning to understand Singapore's and the Land's alternate transportation system.

The Land Transport Authority (LTA) is assisting in increasing the supply of car rental services to cater to and increase demand, while also ensuring that fares remain competitive. Hence, Car marketplaces provide car rentals ranging from annual plans to renting a car by the minute. Customers can pick and choose the best option for them with the click of a few buttons via online or on the car subscription apps.

Additionally, entrepreneurs receive grants ranging from SGD 5,000 to SGD 600,000 from the government and educational institutions to help them start and/or grow their businesses. There are also numerous incubators and a credible list of Angels and VCs to assist founders in getting their business started in Singapore. Such instances are driving with new entrants entering the market.

Competitive Landscape

The Singapore car rental industry includes international companies such as Avis-Budget, Sixt, and Hertz, as well as local companies such as Ride Now, and Motorist. International car rental companies charge 50% more than local car rental companies such as Sixt, RideNow, Motorist.sg, and Aka. International car rental companies, on the other hand, typically have a larger selection of luxury and imported cars than local car rental companies. The players are engaging in partnerships with foreign players to launch car rental services in singapore. For instance,

• In January 2021, Tribecar, a Singapore-based car-rental platform, announced a partnership with NTUC Income and CARRO on Tuesday to provide next-generation smart city insurance for cars in their "Super Economy" category. The alliance aims to provide apparent motor insurance coverage through a usage-based proposition, which was first piloted in Singapore, where motor insurance is no longer based on a fixed cost but is tied to smart data from the vehicle, such as mileage, location, and timing consumption.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
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