Saudi Arabia Vehicle Renting Market Analysis

Saudi Arabia Vehicle Renting Industry Analysis

Vehicle Type Insights

• The light category dominates the market by contributing 60% revenue in 2024. This is because LCVs have become increasingly popular in both the personal and business spheres due to their adaptability, affordability, and suitability for a variety of tasks, including the transportation of goods, cargo, and passengers.
• The heavy commercial vehicle category is expected to witness a CAGR of 9.5% in 2024−2030. The rise in the demand for renting HCVs for the long-distance transportation of heavy machinery and cargo is due to the country's growing manufacturing, logistics, and infrastructure sectors.

The vehicle types covered in the report include:

• Light (Larger Category)
• Heavy (Faster-Growing Category)

Duration Insights

• The short-term category dominates the market by contributing 65% revenue in 2024. This is due to the fact that rental durations generally range from a few hours to a few weeks.
• Tourists, business travelers, and corporate clients require vehicle rental services for several events and majorly for a day or two (a week at the most).
• The long-term category is expected to witness a CAGR of 9.5% in 2024−2030 because it includes rental periods of several months or years.
• The rising expatriate population in Saudi Arabia bodes well for its economy, encouraging an increasing number of companies to establish operations here.
• The current employee mindset impels businesses to offer pickup and drop facilities, which is why companies usually go for long-term car rental plans, as their need is omnipresent.

The following durations are included in the report:

• Short-Term (Larger Category)
• Long-Term (Faster-Growing Category)

Propulsion Insights

• The gasoline category will dominate the market in 2024. This is because most rental service providers, drivers, OEMs, and garages are accustomed to gasoline-powered vehicles, and this fuel is readily available in the kingdom.
• The electric category is expected to witness a highest CAGR in 2024−2030 due to government initiatives and incentives to promote electric mobility and reduce emissions.
• For instance, in 2022, a joint venture between PIF and Taiwan's Foxconn, Ceer, was established to design, produce, and market a variety of electric vehicles (EVs) in Saudi Arabia.

The following propulsions are included in the report:

• Diesel
• Electric (Fastest-Growing Category)
• Gasoline (Largest Category)
• Others

Channel Insights

• The offline category dominates the market in 2024. This is because of the wide network of conventional offline channels, which include physical locations and counters at hotels and airports.
• The convenience and one-on-one communication provided by offline rental channels continue to be preferred by customers, particularly for short-term rentals.
• The online category is expected to witness a higher CAGR in 2024−2030 due to the increasing internet penetration and adoption of digital technologies among customers.
• The growth in the availability of digital services and e-commerce, such as online booking platforms and mobile apps, makes online booking services more widely available and enables users to rent vehicles whenever and wherever they want.

The following channels are included in the report:

• Online (Faster-Growing Category)
• Offline (Larger Category)

End Use Insights

• The personal category will dominate the market in 2024.
• There is a vast range of customers who rent vehicles for various purposes, such as occasional commercial use, leisure, and tourism.
• In 2023, UN Tourism recorded that Saudi Arabia welcomed almost 100 million tourists, establishing it one of the global tourism powerhouses.
• Additionally, this category is dominant because of a large population, rising disposable incomes, and a growing emphasis on domestic travel.
• The business category is expected to witness a higher CAGR in 2024−2030 due to the increasing number of vehicles being rented by corporations and enterprises. In addition to using them for client visits, businesses also rent them for last-mile deliveries and employee pickup and drop.

The following end uses are included in the report:

• Business (Faster-Growing Category)
• Personal (Larger Category)