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

The Middle East Car Rental Market is segmented by Booking type (Online booking, Offline booking), Application type (Leisure/Tourism, Daily utility), Vehicle Type (Economy cars, Luxury cars), End-User type (Self-driven, Chauffeur), and Country (Saudi Arabia, Kuwait, United Arab Emirates, Qatar, and Rest of Middle East). The report offers market size and forecasts for GCC Car Rental in terms of value (USD Million) for all the above segments.

Market Snapshot

middle east car rental market analysis
Study Period: 2018-2027
Base Year: 2021
CAGR: >15 %

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Market Overview

The Middle East Car Rental Market is valued at USD 600.41 Million in 2021 and is expected to reach USD 1642.21 Million by 2027, registering a CAGR of over 15% during the forecast period.

The market for car rentals was severely impacted by the COVID-19 pandemic. The COVID-19 pandemic has caused the region's car rental market to slow down completely due to the sudden and complete suspension of transportation. The Middle Eastern countries' rental car demand continued to decline as a result of the region's declining preference for shared mobility.However, in the aftermath of the pandemic, as the number of tourists has significantly increased, the Middle Eastern's demand for car rentals has significantly increased and is anticipated to continue throughout the forecast period.

Over the long term, the car rental market's growth is favorable due to stringent government legislation on purchase and car driving in the country. Using public transportation can become time-consuming and unpredictable. Moreover, public transport doesn't give an end-to-end ride, which is especially unfavorable among tourists.

In every Middle Eastern nation, expanding economies like Oman and the United Arab Emirates have fueled the rental car market.Among the Middle Eastern countries, Saudi Arabia generates the most revenue from car rentals.Outstation, event, self-driving, employee transportation, airport transportation, and local use are just a few examples of the many uses for car rentals.In addition, they are providing insurance, entertainment systems, and additional services.The developed Middle Eastern nations are also starting to take notice of the rise of electric cars, which offer the same functionality with the added benefit of having fewer negative environmental effects.

In every Middle Eastern nation, expanding economies like Oman and the United Arab Emirates have fueled the rental car market.Among the Middle Eastern countries, Saudi Arabia generates the most revenue from car rentals. Outstation, event, self-driving, employee transportation, airport transportation, and local use are just a few examples of the many uses for car rentals.In addition, they are providing insurance, entertainment systems, and additional services.The developed Middle Eastern nations are also starting to take notice of the rise of electric cars, which offer the same functionality with the added benefit of having fewer negative environmental effects.

Scope of the Report

Car rental companies rent out cars for a suitable fee for a particular duration. Generally, hiring periods could range from a few hours to also a few days or weeks. Car rentals can have various purposes, including airport transport, local usage, outstation, event transportation, self-drive, and employee transportation. They are also offering additional services such as entertainment systems, GPS navigation systems, and insurance.

The Middle East Car Rental Market is segmented by Booking type, Application type, Vehicle Type, End-User type, and Country.

By Booking Type, the market is segmented into Online booking and Offline booking

By Application, the market is divided into Leisure/Tourism and Daily utility

By Vehicle Type, the market is divided into Economy cars and Luxury cars

By End-User type, the market is divided into Self-driven and Chauffeur

By Country , the market is segmented into Saudi Arabia, Kuwait, United Arab Emirates, Qatar, and Rest of Middle East.

The report also provides market sizing and forecast for all the above-mentioned segments.

Booking type
Online booking
Offline booking
Application
Leisure/Tourism
Daily utility
Vehicle Type
Economy cars
Luxury cars
End-User Type
Self-driven
Chauffeur
Country
Saudi Arabia
Kuwait
United Arab Emirates
Qatar
Rest of Middle East

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Key Market Trends

Online Rental Booking Continues to Witness Major Demand

In the region, most of the customers prefer renting cars online. As the car rental market experiences growth in the demand during peak holiday seasons, people tend to book cars in advance. Only a handful of cars are booked through rental stores, and that too, mostly during the offseason.

Currently, booking online also serves a variety of purposes, such as verification of the renter's documents, offering information to the renter regarding the car, determining the details of the drop, and pickup up the rented car at a certain place e-signing of contracts, and cashless transactions. These have helped the car rental companies to gain a competitive edge over their peers during the past few years.

Car rental services offer multiple options that are affordable and can be chosen to suit the customer's needs. The car rental industry in the Middle East nations also sees digital transformation with improved online services, ease of usability, and user satisfaction. Also with the added benefit, minimal responsibility for maintenance, repair, and 24/7 availability is driving the growth Online Rental Booking

Furthermore, the trend of online renting a car through apps has improved over the period as app developers have been designing mobile rental applications with more advanced booking features that offer more vehicle availability and comparable rental costs on a single platform. For instance, OneClickDrive.com is the United Arab Emirates' largest online platform for car rentals and car leasing. It offers users the choice of more than 700 cars from 50 rent-a-car companies.

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Saudi Arabia Captures a Major Market Share

Saudi Arabia is one of the most famous pilgrimage places with holy sites like Mecca and Medina that witness large pilgrims during Eid Al-Fitr and Eid Al-Adha festivals. As a result, the country has an annual visitor count of over 16 million, most of which occur in Ramadan. Thus, the majority of tourism in the country is considered religious.

This Saudi Arabia car rental market has seen a constant rise in demand for car rentals, especially amongst the local players in the Middle East Region. Few major players are Hertz Corporation, Sixt, Avis Corporation, and Europcar. As per the WTTC, tourism contributed 9% to the Saudi Arabian GDP of USD 65 billion. Most visitors in the country are from Asia and nearby Middle Eastern countries.

The car rental market's growth is favorable due to stringent government legislation on purchase and car driving in the country. Notably, the month of Ramadan sees tourists from Middle Eastern countries. Bangladesh, Pakistan, Indonesia, Yemen, and Egypt who prefer to rent a car. Additionally, the country has recently lifted a ban on women from driving vehicles. This move allowed numerous women to drive and helped the demand in the car rental market grow by leaps and bounds, as many women with valid driving licenses were finally able to access rented cars on their own.

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Competitive Landscape

The Middle East Car Rental Market is moderately consolidated with international and regional players such as Avis Budget Group Inc, SIXT, Hertz Corp, Theeb Rent A Car, Enterprise Holdings Inc and others. To have an edge over their competitors, the major rental companies are making joint ventures, and partnerships to launch newer products.

  • In January 2022, ekar, a car-sharing platform from the United Arab Emirates, is partnering with some of Saudi Arabia's largest rental car companies to provide a car subscription leasing service throughout the country.Insurance, upkeep, and roadside assistance are included in the delivery of subscription cars to customers' doors.At any time, the cars can be exchanged, upgraded, or returned.

Recent Developments

  • In July 2022, In accordance with its plans to expand to all of Saudi Arabia's cities, regions, and provinces, Theeb Rent A Car has opened its second location in Hail city, which is in the northwest of the country. According to a statement, the company plans to improve the services it provides to individuals, businesses, and government agencies in this manner.
  • In March 2022, After Oman, the technology platform for renting cars, Selfdrive, is opening offices in Qatar and Bahrain.With the app's wide range of product options and seamless customer experience, the company hopes to gain 50-65% of the digital rental market share in these markets.As part of the launch offer, the platform gives its customers a flat discount of BD10 or QR100 on their first booking.
  • In June 2021, Under its home services umbrella, Amazon now offers online car rental services in the UAE. Customers will be able to rent cars in Dubai, Abu Dhabi, Sharjah, Ajman, and Ras Al Khaimah. The rentals will last anywhere from one day to a month, and they will be delivered to the address you choose within three hours of booking.

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 Five 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

    1. 5.1 Booking type

      1. 5.1.1 Online booking

      2. 5.1.2 Offline booking

    2. 5.2 Application

      1. 5.2.1 Leisure/Tourism

      2. 5.2.2 Daily utility

    3. 5.3 Vehicle Type

      1. 5.3.1 Economy cars

      2. 5.3.2 Luxury cars

    4. 5.4 End-User Type

      1. 5.4.1 Self-driven

      2. 5.4.2 Chauffeur

    5. 5.5 Country

      1. 5.5.1 Saudi Arabia

      2. 5.5.2 Kuwait

      3. 5.5.3 United Arab Emirates

      4. 5.5.4 Qatar

      5. 5.5.5 Rest of Middle East

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles

      1. 6.2.1 Avis Budget Group Inc.

      2. 6.2.2 Hertz Corp.

      3. 6.2.3 Enterprise Holdings Inc.

      4. 6.2.4 Fast Rent a Car

      5. 6.2.5 Sixt SE

      6. 6.2.6 Europcar

      7. 6.2.7 Hanco

      8. 6.2.8 Theeb Rent A Car

      9. 6.2.9 National Rent A Car

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

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Frequently Asked Questions

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

The Middle East Car Rental Market is growing at a CAGR of >15% over the next 5 years.

The Middle East Car Rental Market is valued at 600 Million USD in 2018.

The Middle East Car Rental Market is valued at 1642 Million USD in 2027.

Avis Budget Group Inc., Hertz Corp., Enterprise Holdings Inc., Fast Rent a Car, Sixt SE are the major companies operating in Middle East Car Rental Market.

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