"Rent a car," or car rental services, are when a company offers vehicles to customers on temporary bases and charges them based on the type of vehicle chosen, miles/hours driven, and the number of days, among other parameters. These services are swiftly gaining popularity across the UAE, owing primarily to the mounting influx of tourists, pilgrims, & migrants using rental cars for local commute.
The UAE Rent a Car Market is projected to register around 8.9% CAGR during the forecast period, i.e., 2022-27. Most of the market expansion would be driven by the growing focus of the UAE government on the economic diversification away from the oil & gas sector, i.e., portraying massive expenditure on the tourism sector to attract tourists, pilgrims, and migrants to the country. As a result, the demand for car rental services for local commute is increasing swiftly across the country and driving the UAE Rent a Car Market.
|Study Period||Historical Data: 2017-20|
|Base Year: 2021|
|Forecast Period: 2022-27|
|Region Covered||Dubai, Abu Dhabi & Al Ain, Sharjah & Northern Emirates|
|Key Companies Profiled||Thrifty, Hertz, Emirates Transport, Massar Solutions, Sixt Rent a Car, Fast rent a car, Kayak, Europcar, Avis Rent a Car, Dollar Rent a Car, Others|
|Unit Denominations||USD Million/Billion|
Besides, favorable policies & easy licensing in the country are leading to the consumer inclination toward using rental cars for commercial applications like cab & taxi services, etc. In addition, massive expenditure on hosting Auto Expos, where the event spans around 6 months & expects more than 3 million people, is another crucial aspect playing a prominent role in propelling the demand for car rental services in the UAE.
Moreover, growing encouragement by the UAE government for the adoption of electric & hybrid vehicles by laying out incentives is also likely to generate growth opportunities for the leading market players with an anticipated rise in the vehicle fleet over the coming years. Furthermore, easy licensing is showcasing a mounting competition between prominent car rental companies in the UAE for offering superior value-added services instead of just heading toward a price war.
Such strategies include services like a sliding scale termination policy, pooled mileage for corporates, and guaranteed replacement of vehicles during servicing, among others. Hence, these aspects indicate that the UAE Rent a Car Market is set to observe an upward trend through 2027.
Impact of Covid-19 on the UAE Rent a Car Market
In 2020, the Covid-19 pandemic had a decelerating effect on most industries across the UAE, and the Rent a Car Market was no exception. All car rental services were suspended in the country owing to the imposition of lockdown & stringent movement restrictions by the government to curb the spread of this dreadful disease.
Additionally, the severity of the disease was so concerning that most people restrained themselves from using rental services and instead chose personal vehicles to avoid the virus spreading. As a result, the market witnessed a downward trend and caused massive financial losses for the leading players & stakeholders.
However, with gradual improvement in the pandemic situation, the government uplifted the restrictions and allowed the recommencement of business operations. It, in turn, not only resumed the car rental services but also demonstrated a mounting influx of tourists, which, in turn, surged the growth of the UAE Rent a Car Market.
Based on the Booking Type:
Of both, online bookings are expecting the largest share in the UAE Rent a Car Market during 2022-27, mainly on the back of surging penetration of smartphones & the internet, coupled with the convenience of choosing the most appropriate cars for rent after comparing different websites.
Besides, car rental service providers are increasingly adopting online portals owing to their ease & convenience. The country is witnessing growing customer preferences toward online channels for car rental services, owing to various emerging car rental service applications, significant updates in existing platforms, and the advent of subscription-based services.
In addition, an increasing number of partnerships, collaborations, and mergers & acquisitions between the leading car rental service providers to offer exceptional customer services further project a significant boost to the UAE Rent a Car Market for online bookings through 2027.
Based on the Application:
Here, commercial applications are likely to contribute substantially to the market expansion through 2027, owing to massive government investments in developments across the tourism sector and improving road connectivity in the UAE to cater to the needs of tourists, pilgrims, & migrants for local commutation.
As a result of the surging demand for cab or taxi services, there's a mounting competition between the prominent players in offering new services & extra value benefits to attract more and more people toward opting for rent a car services. Besides, the paradigm shift of major rent-a-car service providers toward digital platforms to offer the convenience of online car rental services is also boosting the UAE Rent a Car Market for commercial applications.
Furthermore, favorable licensing policies leading to numerous drivers seeking commercial vehicles to cater to the growing consumer requirements for car rental services also project remunerative growth prospects for the UAE Rent a Car Market in the coming years.
Geographically, the UAE Rent a Car Market expands across:
In the UAE, the Dubai Rent a Car Market is projected to be the largest during 2022-27. It attributes principally to the city being a prominent area of attraction with a massive influx of tourists, pilgrims, migrants, and corporates, among others, i.e., making a positive influence on the demand for rental cars for local commute. Additionally, favorable policies & opportunities are attracting numerous car rental companies to establish their corporate offices in the city. Hence, these aspects are demonstrating a burgeoning demand for car rental services in Dubai while generating growth prospects for the UAE Rent a Car Market through 2027.
Key Questions Answered in the Market Research Report:
Frequently Asked Questions
A. The UAE Rent a Car Market is projected to grow at a CAGR of around 8.9% during 2022-27.
A. The growing influx of tourists, pilgrims, and migrants in the country seeking rental cars for local commutation is the prominent factor projected to drive the UAE Rent a Car Market through 2027.
A. Commercial applications are anticipated to emerge as an area of remunerative opportunities for the leading players in the UAE Rent a Car Market over the forecast years.
A. Dubai is projected to hold a prominent share in the UAE Rent a Car Market during the forecast period.