Need a report that reflects how COVID-19 has impacted this market and its growth?
United Arab Emirates car rental was valued at USD 885.83 million in 2021 and expected to surpass a net valuation of USD 1,729.80 million by 2027 end, registering a solid CAGR growth of 11.8% during the forecast period.
The COVID-19 pandemic has partially affected the market for the United Arab Emirates car market with strict lockdown and a decrease in traveling to restrain the spread of the virus. However, with an increase in the number of tourists visiting the UAE, the demand for car rental services has picked up the pace by the end of 2021 and is likely to continue over the forecast period.
Consumer preferences shifted as a result of a variety of circumstances. Most notably, health concerns drove people and families to hire vehicles rather than public transportation. The rise of digital platforms in the marketplace has also facilitated the selection of cars for hire or leasing.
Significant growth in the population of individuals traveling for business and leisure travel is driving demand for car rental services. Rising internet penetration across the country has enabled enterprises in the sector to attract a wider consumer base through the use of smart mobile applications for customer convenience.
- Udrive, the app-based pay-per-minute car rental service, has announced a USD 5 million Series B round of funding, in which it will welcome commercial, institutional and private investors. Such funding will positively impact the market growth in the upcoming years.
Thus, growing commercial events and reviving tourism activities will positively impact the market growth during the forecast period.
Scope of the Report
Car renting refers to the business of leasing and renting a car from rental service providers based on some valuation. This renting can be on an hourly basis or for a longer time span.
The car renting market is segmented by rental duration type, booking type, application type, driving type and vehicle type. By rental duration type , the market has been segmented into short term and long term. By booking type, the market has been segmented into online and offline. By application type, the market has been segmented into daily utility and tourism. By driving type, the market has been segmented into self-driven and chaffeur and by vehicle type, the market is segmented into economy cars, luxury cars and SUV. For each segment, the market sizing and forecasting are based on value (USD million).
Key Market Trends
Growing Demand for Travel to Propel The Demand
The emergence of staycations is a new trend in the travel and tourist sector. This relatively new concept defines a blend of leisure and business travel and is gaining traction.
Bringing the family on professional travels is becoming more accepted as businesses embrace this trend to promote staff retention and relieve some of the stress of crucial road warriors. As younger employees become more business travelers, this incentive is becoming more tempting to recruiters. This idea is especially useful for abroad visits where employees may become familiarized with areas, especially significant business specifics.
The expansion of the car rental business is favored by the country's stringent government laws on car buying and driving. Using public transit may be inconvenient and unexpected. Moreover, cities such as Dubai require long distances to visit tourist attractions. Furthermore, public transportation does not provide an end-to-end journey, which is particularly inconvenient for visitors.
Players in the market are coming with convenient plans for their users to attract new customers and gain market share. For instance,
- In February 2021, self-driving vehicle platform, ekar, launched a new subscription-based program for its users in the Middle East. The portal’s customers in the United Arab Emirates and Saudi Arabia can book cars ranging from economy to luxury for a period of one month to nine months.
Taxis, passenger cars and charter vehicles with flexibility and other features such as real-time feedback, vehicle monitoring, and rating to end clients are on the rise. Numerous smartphone applications make it easier to find available automobiles and compare rates with the respective car rental businesses. Such development has also positively impacted the market growth during the forecast period.
To understand key trends, Download Sample Report
Online Booking Services to Gain Momentum
Car rental services in the UAE provide booking options on a mobile app or website of a cab company. Further, the option of an online mode of payment has eased the process. The prominent factors driving this ecosystem are affordability and ease of access to the services. The demand for car rental is escalating due to on-demand payment from customers for convenience and affordability.
Online booking mode has several advantages and numerous transparency-related issues that are continuously monitored and rectified by companies. The day-to-day operations of car rental companies are managed through a centralized system. Compliance policies, rules, regulations, and terms and conditions are followed, which often differ from one company to the other. Furthermore, the payment process for booking is managed by mediators or any third-party organization. With more entities engaged, this becomes a problem and creates a lack of transparency. For instance:
- In November 2021, EzzeCar launched as a virtual marketplace for car rental companies to sell their vehicles and manage their fleets, with the goal of being a one-stop-shop for car renters to obtain vehicles that match their needs. The platform provides vehicles ranging from inexpensive to luxury and sports automobiles.
Considering the aforementioned factors, demand for online booking mode is expected to witness more prominence during the forecast period.
Some of the prominent players in the United Arab Emirates Car Rental Market are SixtSE, The Hertz Corporation, and AVIS Rent a Car, among others. As the rental car demand is growing in the country, car rental service providing companies are expecting development interms of online and offline services to feliciate the consumer shifting behaviours.
Moreover, several strategies have been adopted by the players to robust their connectivity for car rental and update their present fleet with more vehicles to address rising consumers demand in United Arab Emirates.
- In 2022, Uber has set an aim of one in every four journeys requested via the Uber app in the UAE being emission-free by 2030.
In July 2022, the smart mobility super app Selfdrive.ae launched "NEOS" which is offering game-changing service to UAE customers. The Super App has strategically partnered itself with automakers and car dealerships across the United Arab Emirates in order to offer this program across 50 different car models ranging from Chevrolet, Cadillac, Volkswagen, BMW, GMC, Audi, Mercedes, and more brands.
In February 2022, United Arab Emirates-based car rental firm Udrive secures extra USD 5 million in funding for expanding its business potential. The funding has come as Udrive recently recorded strong growth in 2021 making two million trips to date to register itself as one of the largest rental booking platforms based on transactions per car in the UAE region.
Table of Contents
1.1 Study Assumptions
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Drivers
4.2 Market Restraints
4.3 Porters Five Force Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers/Consumers
4.3.3 Bargaining Power of Suppliers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION (Market Size in Value USD Million)
5.1 Rental Duration
5.1.1 Short Term
5.1.2 Long Term
5.2 Booking Type
5.3 Driving Type
5.4 Vehicle Type
6. COMPETITIVE LANDSCAPE
*List Not Exhaustive
6.1 Vendor Market Share
6.2 Company Profiles
6.2.1 Avis Budget Group Inc.
6.2.2 Enterprise Holdings Inc.
6.2.3 Europcar International
6.2.4 The Hertz Corporation
6.2.5 SIXT SE
6.2.6 Speedy Drive Car Rental LLC
6.2.7 Udrive Car Sharing
6.2.8 eZhire Technologies FZ LLC
6.2.9 Uber Technologies Inc.
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
You can also purchase parts of this report. Do you want to check out a section wise price list?
Frequently Asked Questions
What is the study period of this market?
The United Arab Emirates Car Rental Market market is studied from 2018 - 2027.
What is the growth rate of United Arab Emirates Car Rental Market?
The United Arab Emirates Car Rental Market is growing at a CAGR of 11.8% over the next 5 years.
What is United Arab Emirates Car Rental Market size in 2018?
The United Arab Emirates Car Rental Market is valued at 990 Million USD in 2018.
What is United Arab Emirates Car Rental Market size in 2027?
The United Arab Emirates Car Rental Market is valued at 1729 Million USD in 2027.
Who are the key players in United Arab Emirates Car Rental Market?
SIXT SE, Avis Budget Group, The Hertz Corporation, Speedy Drive Car Rental LLC, Uber Technologies are the major companies operating in United Arab Emirates Car Rental Market.