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
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.
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:
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Reports
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Ken
Research
Ankur
Gupta, Head Marketing & Communications
+91-9015378249
