How Car Rental and Leasing Market Is Positioned in Saudi Arabia?
The Car Rental & Leasing Market in Saudi Arabia is currently at its growth stage. Increase in number of establishments and growing tourism industry has been complimenting the market size of this industry, coupled with increasing employment rate and GDP. The market has grown significantly during the period 2013 to 2018, though a drop has been registered in the market during 2015-2016 owing to recession period in Saudi Arabia. The Saudi Arabia car leasing segment is primarily dominated with corporate demand especially from the industries such as logistics, construction and oil and gas sector with considerable demand for transportation of equipment and employee mobility. The logistics industry has the biggest share in terms of demand followed by FMCG & E-commerce industry, while the demand from government & semi- government offices and others grew at a stable rate in 2018. The increasing market size of industries such as construction and e-commerce will directly impacts the growth rates of car rental industry in the country as with the increase in number of construction contracts, the demand for more rental car for transportation and corporate visitors will increase in the market
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The increasing number of tourist arrivals especially during the festivals such as Eid Al- Fitr & Eid Al- Adha has helped the revenue to grow at a CAGR of ~% during the review period. Few of the car rental companies United International Transportation Company (Budget), Hanco rent a car, Theeb rent a car, Best rent a car, Key rent a car, Al Wefaq rent a car, Hertz rent a car, Avis rent a car, and Samara rent a car, Al Tayyar rent a car and others. These companies are providing services such as repair & maintenance, on road assistance, 24*7 customer support, comprehensive insurance package and service centre and mobile workshops etc. Nowadays, there are many rental companies that are providing limousine service to their clients to increase their client retention rate.
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The market witnessed a growth at the rate of approximately ~% in terms of revenue and fleet during the review period of 2013 to 2018.
Which Type Of Vehicle Has Been More Successful In 2018?
The market is dominated by the SUV with or without luggage and pickup cargo cars based on the fleet size in 2018. This is due to the high usage of rental & leasing cars by corporate for transportation. SUV and pick cargo cars are comparatively big in size with luggage compartments and thus suitable for handling of equipments and tools. The major demand for these cars occurs from logistics, telecommunication and construction industries. In terms of rental cars, SUV is preferred as generally tourists arrive in group of 6-7 people. SUV with or without luggage and pickup cargo cars accounts for ~% share of the fleet size into car rental & leasing market in Saudi Arabia. The second most preferred vehicle in car leasing is medium category which includes cars such as Honda Accord. This is due to the increasing employment rate in the kingdom and people opt to lease cars compared to buy them as it is comparatively cheaper. The corporate demands for medium category cars for meeting the requirements for client visits and employee mobility. Medium category cars accounted for ~% share on the basis of fleet size in car rental & leasing market in Saudi Arabia.
Share of Different Regions in KSA Car Rental and Leasing Market
The central province is dominating the market in terms of fleet size in Saudi Arabia car rental and leasing market. This is due to the presence of large number of industries in this region particularly in Riyadh and Jeddah. Also, Riyadh is the most populous city in Saudi Arabia and thus, in order to capture the individual and corporate demand for leasing and rental, companies keep their maximum fleet in this region. The central region accounts for ~% share of the total fleet size in Saudi Arabia .The second ranked region in terms of fleet size is western province. This is due to the presence of institutions and universities in this region. Also, western region is the most popular tourist destination due to cities such as Mecca & Medina. These places are the major pilgrimage attractions in Saudi Arabia. Considering the demand from corporate and tourism industry, car rental companies maintain a significant number of cars in western region. Western province accounts for ~% share of the total fleet size in car rental & leasing market in Saudi Arabia.
What are the Major Challenges in the Saudi Arabia Car Rental & Leasing Market?
Saudization is posing as a major challenge for international car rental companies and car dealers. The saudization supports the employment of Saudi nationals into car rental companies and discourages foreign employees. This ban led to the shutdown of many small car rental companies in the market. This law results into low profit for the companies as they need to pay high salaries to Saudi’s workers. The car rental companies are also facing major challenge from the government initiative of developing public transport in Saudi Arabia. SAPTCO has been established in order to improve the public modes of transport. This creates a threat for car rental companies as individual would start shifting towards public mode of transport as they would be available at cheaper rates. Increased premium by insurance company on rental cars is also creating hindrance in the growth of Saudi Arabia car rental industry. Insurers hiked compulsory motor third party liability insurance premiums due to the risk and losses suffered during the period of recession. Many insurance companies now refuse to provide insurance coverage to rental companies due to which there is a situation of monopoly where the prices are in the hands of few insurance companies. As insurance is the pre-requisite demand from corporate and individuals, thus it is a big challenge for car rental companies in the market.
Key Segments Covered in Saudi Arabia Car Rental & Leasing Market
By Car Dealers & Car Rental Companies (On the basis of fleet size)
Car Dealers
Car Rental Companies
By Type of vehicle (On the basis of fleet size)
SUV with or without luggage and pickup & cargo cars
Medium category
Small category
Premium/ Luxury
By Duration (On the basis of fleet size)
1-2 years
More than 2 years but less than 4 years
4 years
More than 4 years
By Region (On the basis of fleet size)
Central
Western
Eastern
Southern
Northern
By End User (On the basis of fleet size)
Logistics
FMCG & e-commerce
Oil & Gas
Construction
Government& semi- government offices
Other Industries
By User (On the basis of fleet size)
Corporate
Individual
By On Airport & off Airport (On the basis of revenue)
On Airport
Off Airport
Time Period Captured in the Report:
Historical Period: 2013-2018
Forecast Period: 2019-2023
Key Target Audience
Car Rental Companies
Car Dealers
End User Industries
Individuals
Companies Covered:
United International Transportation Company (Budget)
Hanco rent a car
Best rent a car
Theeb rent a car
Al Wefaq rent a car
Hertz rent a car
Avis rent a car
Autoworld rent a car
Samara rent a car
Al Tayyar rent a car
Key rent a car
Ford Aljazerah
Al Jomaih
Universal Motors
Key Topics Covered in the Report
Executive Summary
Research Methodology
Saudi Arabia Car Rental & Leasing Market Size
Saudi Arabia Car Rental & Leasing Market Segmentation
SWOT Analysis of Saudi Arabia Car Rental & Leasing Market
Trends and Development in Saudi Arabia Car Rental & Leasing Market
Issues and Challenges in Saudi Arabia Car Rental & Leasing Market
Regulatory Scenario of Saudi Arabia Car Rental & Leasing Market
Recent Developments in Saudi Arabia Car Rental & Leasing Market
Emerging Technologies in Saudi Arabia Car Rental & Leasing Market
Competitive Scenario in Saudi Arabia Car Rental & Leasing Market
Company Profiles of Major Players in Saudi Arabia Car Rental & Leasing Market
Saudi Arabia Car Rental & Leasing Market Future Outlook and Projections, 2018-2023E
Analyst Recommendation in Saudi Arabia Car Rental & Leasing Market
For more information on the research report, refer to below link:
Saudi Arabia Car Rental and Leasing Market Outlook to 2023
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