KSA Car Rental and Leasing Market Analysis – Size and Share, Trends, Growth, CAGR Status, Forecast 2023-2033: SPER Market Research

Car rental and leasing refer to services where vehicles are temporarily provided to customers for a specified period, typically ranging from a few hours to several months. In car rental, customers pay a fee to use a vehicle for a short-term duration, such as for vacations, business trips, or while their vehicle is undergoing repairs. Rentals are usually managed through rental agencies that maintain fleets of vehicles, offering various models and types to suit different customer needs. Car leasing involves a longer-term arrangement where customers lease a vehicle for a fixed period, often several years. During the lease period, the lessee pays monthly payments to use the vehicle, which typically covers depreciation costs and interest. Leasing agreements may also include additional services such as maintenance and insurance, depending on the terms negotiated.

According to SPER Market Research, ‘KSA Car Rental and Leasing Market Size- By Type, By Vehicle Type, By Vehicle Body Style Type, By Booking Type- Regional Outlook, Competitive Strategies and Segment Forecast to 2033’ states that the KSA Car Rental and Leasing Market is estimated to reach USD 4.91 billion by 2033 with a CAGR 9.42%.

The country’s robust tourism sector, bolstered by religious tourism to cities like Mecca and Medina, and increasing business travel, creates substantial demand for rental vehicles among visitors and corporate clients alike. Rapid urbanization and economic diversification efforts are boosting demand for flexible transportation solutions among residents and businesses, encouraging the use of rental and leasing services. Regulatory changes promoting tourism and easing visa restrictions for international visitors have stimulated demand for rental vehicles for exploring the kingdom. The rise of ride-hailing platforms has spurred partnerships between these services and rental companies, further expanding the market’s reach and accessibility. Moreover, ongoing infrastructure developments, including new airports and public transport networks, support the car rental and leasing market by enhancing connectivity and accessibility for travelers and residents alike.

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Economic fluctuations and volatility in oil prices, given the kingdom’s reliance on oil revenues, can affect consumer spending and business investments, potentially leading to fluctuations in demand for rental and leasing services. Regulatory complexities and bureaucratic procedures may pose barriers to market entry and operational efficiency for rental companies, particularly concerning licensing, insurance requirements, and compliance with local regulations. Infrastructure limitations and traffic congestion in major cities like Riyadh and Jeddah can hinder the efficiency of rental services and increase operational costs, affecting service delivery and customer satisfaction. Moreover, cultural factors and preferences for vehicle ownership among Saudis present a challenge in promoting the benefits of rental and leasing as viable alternatives.

The Coronavirus pandemic has impacted KSA vehicle rental and renting market, influencing methodology and generally speaking interest. Many travel limitations and lockdown measures were carried out during the pandemic to diminish the infection’s spread. Subsequently, individuals couldn’t move as uninhibitedly as they had beforehand, bringing about a diminishing popularity for vehicle rental and renting administrations. Due to movement and vacation limitations, fewer individuals visited Saudi Arabia for both recreation and business targets. Subsequently, the number of vacationers and business explorers who expected to lease vehicles diminished.

The largest market share for KSA Car Rental and Leasing Market is held by Riyadh due to its strategic location and robust infrastructure making it a primary destination for businesses, government institutions, and foreign investments. Budget Rent a Car, Hanco Automotive, Heartz Corporation, Lumi Car Rentals, Theeb Rent-A-Car are a few of the major names in the market.

KSA Car Rental and Leasing Market Segmentation:

By Type: