Long Term Car Rentals Occupy a Share of 50% in the Overall Car Rental Market in Saudi Arabia
Posted on 18 January 2017 by KenResearch Automotive, Transportation and Warehousing,
According to a Market Research Report titled "Saudi Arabia Car Rental and Leasing Market Projections to 2020 - Religious Tourism and Short Term Car Rental to Stimulate Growth" by Ken Research
Saudi Arabia car rental market has accounted for a significant share in the Middle East car rental service. It has one of the most highly developed car rental service that involves substantial amount of consumer spending on car rental services. Saudi Arabia has large geographical area and is well connected by roads, thus car rental services are considered reasonable options for travelling purposes in Saudi Arabia. Majority of the population in Saudi Arabia has a higher car ownership and has majorly been driven by leisure tourism services that are inclusive of religious tourism.
Car sharing on the other hand majorly comprises of carpooling services that involves pooling a car with customers that travel through the same route or have the same destination. Car sharing is a niche market and has not witnessed preponderance in the past few years on account of higher car ownership in the country.
The car rental market is largely dependent on vehicle manufacturing and overall economic conditions in the new and used vehicle market, since these factors directly impact the cost of acquiring vehicles and the disposition value of vehicles.
The tourism industry in Saudi Arabia had witnessed an inclination in 2010. It has been noticed that the number of car rental fleets in the rental service has inclined over the years from 2010-2015. The number of rented passenger cars for longer duration has enhanced in the past few years due to which the car rental brands in the country have been forced to enhance its fleet size in the country.
Saudi Arabia car rental market has been broadly segmented on the basis of car leasing, short term car rental and Chauffeur driven car segment. Despite the growing demand on car rentals, it still remains highly vulnerable to risks where more than 20% individual customers do not abide by rental conditions, whether in terms of handing over cars at the deadline and payment or parking of cars at different locations. Thereby, the regulations have increased and this calls the corporate to demand cars from organized car rental companies.
The on-airport rental service commonly charges high rates as compared to the off airport segment. On-airport car rentals subjected to daily fees and taxes as opposed to off-airport car rental. Therefore, on-airport car rentals generate higher revenue as opposed to off-airport car rentals.
For more information on the market research report please refer to the below link: