HOW THE SAUDI ARABIA CAR RENTAL AND LEASING MARKET IS POSITIONED?
Posted on 11 August 2016 by KenResearch
During 2015, car leasing has dominated the overall car rental market with the revenues share being accounted at ~% in 2015. The higher domination of car leasing is mainly due to presence of numerous oil and gas and construction companies that hire commercial vehicles.
The car rental industry can also be segmented by “on and off airport” markets. On airport includes pick up and drop off to airports, whereas the off airport segment relates to all other rental services excluding the service in airports. The on airport segment commanded ~% share in the revenues of chauffeur driven car rentals as of 2015. Oil and gas sector has dominated the overall corporate car leasing with a share of ~% in terms of revenues in 2015.
Table: Saudi Arabia Car Rental and Leasing Market Segmentation by Business Segment on the Basis of Revenues in USD Million and Percentages (%), 2015
|Type of Destination||Percentage (%), 2015||Revenues, USD Million, 2015||Remarks|
|Chauffeur Driven Car Rental|
|Short Term Car Rental|
The car rental industry in Saudi Arabia has been dominated by the organized segment that constitutes the maximum share of ~%. Mecca is one of the most popular car rental cities in the country that withheld a share of ~% in 2015. Car rental firms had generated revenues worth USD ~ million in 2015.
What is the Future Outlook for Saudi Arabia Car Rental and Leasing Market?
The car rental industry in Saudi Arabia is booming with high annual growth rate.
Lack of financial stability/ unstable job opportunities and continuous influx of tourists due to the presence of pilgrimage places such as Mecca and Medina has led to the rise in the number of car rental firms in Saudi Arabia.
Rising number of tourist visits from different parts of Middle East region as well as from other parts of the globe will intensify the market for car rental business in the country.
On-airport segment of the industry will be the major growth areas for the car rental companies in Saudi Arabia in the coming few years. The other major factor which can be observed is the recent trend of the car rental facility in Saudi Arabia is the rise in the number of long term car renters due to the rise in the number of business and service expats in the country majorly in Jeddah and Riyadh cities. Projection for the future suggests that the market for car rental is expected to witness promising growth, with revenues is expected to mount at USD ~ million by 2020. During the period 2015-2020, the revenues are expected to incline at a CAGR of ~%, while the fleet size will grow at a CAGR of ~%, with fleet size are expected to be mounted at ~ cars by 2020.
Figure: Saudi Arabia Car Rental and Leasing Market Future Projections, 2016-2020