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

The Indonesia Car Rental Market is segmented By Booking type (Offline and Online), By Rental Duration Type (Short term, Long Term), and By Application Type (Tourism and Commuting). The report offers market size and forecast for all the above segments in value (in USD Billion).

Market Snapshot

Market Overview
Study Period: 2018-2027
Base Year: 2021
CAGR: 15.8 %

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Market Overview

The Indonesia Car Rental Market is valued at USD 291.52 Million in 2021 and is expected to reach USD 781.95 Million by 2027 registering a CAGR of over 15.8% during the forecast period, 2022-2027.

Several sectors have been impacted by the COVID-19 pandemic, with varying effects on the car rental sector. Due to travel restrictions and lockdown measures, many car rental companies encountered difficult situations with decreased demand during the first half of 2020. Due to the high risk of exposure to the virus and the implementation of sanitizing procedures, this sector gained popularity as a safer and more convenient mode of public transit as lockdown measures relaxed. This had a positive effect on the revenues of the car rental industry.

Over the long term, The car rental market in Indonesia is gaining popularity due to the increasing presence of online rental and leasing platforms. With 54% of the Indonesian population having access to the internet, the presence of online platforms is expected to help the market grow.

Another factor for the growth of market is that country has tourist sites, like Bali that witness a vast influx of tourists every year, the car rental market is expected to witness positive growth in the coming years. With growing online platforms, the car rental costs have come down significantly which is encouraging customers to rent a car rather than utilizing taxis or public transport for their trips.

Scope of the Report

The Indonesian Car Rental Market covers the current and upcoming trends with recent technological development. The report will provide a detailed analysis of various areas of the market by Type, Duration, and Application. The market share of significant car rental companies across the Indonesian market will be provided in the report.

By booking type, the market is segmented as Offline and Online.

By Rental Duration Type, the market is segmented as Short term, Long Term.

and By Application Type, the market is segmented as Tourism, Commuting.

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Key Market Trends

Growing Demand for Online Car Rental Services

An increasing number of smartphone-based online rental car booking apps are being used, which is greatly boosting the market growth. With the aid of mobile applications for online booking for the convenience of customers, growing internet usage has aided businesses in the sector in capturing a sizable customer base. Additionally, places like Bali and Jakarta are experiencing growth in their tourism industries, which is projected to positively affect market expansion. It is anticipated that the government's initiative to promote tourism in the nation will help the expansion of the sector as a whole.

Indonesia has a significantly high penetration of internet users, primarily attributed to the availability of high-speed internet at an affordable price. In 2021, the number of mobile internet users in the country stood at 72.8% of the population. This has motivated players to shift their business models from brick-and-mortar structures to online business models to provide an easy and hassle-free experience to their customers.

Many foreign and independent players are expected to develop their online presence in order to participate into the online car rental market. Some players are investing in their own websites and applications in addition to advertising on internet marketplaces. Car rental platforms are likely to focus on establishing a transactional marketplace to enable 100 percent online end-to-end transactions without having to visit dealerships from the comfort of their homes with companies allowing point-to point pick and drop services.

Also, COVID-19 has further aided the market owing to lockdowns and restricted movement which made most dealers rely on internet enquiries and bookings, to boost sales. Virtual bookings are made available through online portals, and home delivery services are being offered by enterprises.

Online platforms have been increasingly growing because they are connecting various vehicle sellers and groups like independent dealers as well as private owners with customers. These platforms are expanding their presence in the region to increase their market share and revenues. 

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Government Efforts to Boost Tourism Aiding the Market Growth

The Ministry of Tourism and Creative Economy of Indonesia is investing in the country's tourism industry with the goal of fostering sustainable and community-based tourism. Five super-priority tourism destinations, eight special economic zones, and 12 sustainable tourism projects are expected to benefit from the investments, which will increase demand for car rental services in the coming years. As a result, the market will experience significant growth over the course of the forecast period.

Before the COVID-19 pandemic, the Indonesian car rental market was expanding at a remarkable rate. When compared to other developed countries, Indonesia has fewer personal cars per capita; as a result, car rentals have emerged as a popular form of transportation in Indonesia. However, the lockdowns, travel bans, and other measures put in place by the Indonesian government to stop the coronavirus's spread caused a pause in business, which had a detrimental effect on the market's expansion. Additionally, since car rental services are heavily utilized by the tourism sector, both domestically and internationally, which was severely hit by the pandemic, the demand for car rentals declined as well.

The World Bank reported that fewer foreign tourists visited Indonesia in 2020 than they did in 2019, falling from 16.107 million to 4.053 million. Furthermore, the corporate sector's demand for car rental services fell even further as a result of the WFH rules that businesses all around Indonesia implemented.

Also in June 2022, Indonesia announced “Digital Nomad” visa to allow remote workers to live there tax-free in an effort to boost tourism numbers back up to pre-pandemic highs. SUch instances are helping car rental market in the country.

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Competitive Landscape

Indonesia has the largest car rental market in South East Asia. However, the market remains very fragmented and the major players account for a little over one-fourth of the market. The remaining market comprises organized players including financial institutions with licensed businesses as well as thousands of small local operators, who have small fleet sizes as well a presence.

Players are partnering with other companies to have an edge in the competition. For instance,

  • In June 2022, MPMX and CARRO signed a strategic partnership that will provide Indonesia with a fully integrated online and offline automotive ecosystem. With this investment, MPMX, Indonesia's leading automotive, transportation, and mobility group, and CARRO, Southeast Asia's largest and fastest-growing automotive marketplace, will begin a partnership to offer Indonesian consumers an end-to-end ecosystem that includes an online marketplace, financing, rental, repair, and aftersales.

Recent Developments

  • In June 2022, Carro acquired a 50% stake in the rental arm of Indonesian automotive group PT Mitra Pinasthika Mustika for nearly USD 54 million, according to a statement from the companies. PT Mitra Pinasthika Mustika Rent (MPMRent) is Indonesia's largest car rental company, with a fleet of over 13,000 vehicles and financing services.
  • In September 2021, Car-rental platform Zoomcar announced the launch of its operations in Indonesia and Vietnam to secure a stronger footprint in Southeast Asia.
  • In September 2021, Indonesia's fastest growing car sharing and rental platform TREVO has announced its operations are available in Bali and launched its TREVO app where users or "guests" can select a vehicle of their choice from a trusted car owner or they name it "host" for whatever period of time - could be a day, a week, or even just a few hours.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Porters 5 Force Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION (Market Size in USD Million)

    1. 5.1 Booking Type

      1. 5.1.1 Online

      2. 5.1.2 Offline

    2. 5.2 Rental Duration

      1. 5.2.1 Short-Term

      2. 5.2.2 Long-Term

    3. 5.3 Application Type

      1. 5.3.1 Tourism

      2. 5.3.2 Commuting

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles

      1. 6.2.1 The Hertz Corporation

      2. 6.2.2 Blue Bird Group

      3. 6.2.3 TRAC

      4. 6.2.4 Mitra Pinasthika Mustika Rent

      5. 6.2.5 Adi Sarana Armada Tbk

      6. 6.2.6 Avis

      7. 6.2.7 Europcar Indonesia

      8. 6.2.8 Globe Rent a Car

    3. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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Frequently Asked Questions

The Indonesia Car Rental Market market is studied from 2018 - 2027.

The Indonesia Car Rental Market is growing at a CAGR of 15.8% over the next 5 years.

The Indonesia Car Rental Market is valued at 291 Million USD in 2018.

The Indonesia Car Rental Market is valued at 781 Million USD in 2027.

The Hertz Corporation, Avis Budget Group, GLOBE Rent A Car, Europcar Mobility Group, TRAC are the major companies operating in Indonesia Car Rental Market.

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