Car rental refers to renting cars for short periods of time, usually from a few hours to a few weeks, through car rental companies or car rental companies. The car rental market is usually organized with various local branches of the car rental companies, and these agencies are primarily located near airports & busy urban areas and also allow online & offline reservations.
The car rental and leasing industry in the United Arab Emirates, which has become an international commercial and tourist destination in recent years, will continue to grow and significantly increase the growth of the car rental and leasing industry. Despite the elevated level of car-ownership in the UAE, the car rental & leasing industry is primarily driven by leisure and business tourism. The UAE tourism sector has grown rapidly in recent years. Numerous buyers are also in favor of renting / leasing a car rather than owning one, so greater interest is expected from car rental companies in expanding their vehicle fleets. Increasing use of smartphones, growing adoption of car rental management software, and increasing preference of online booking of cars due to various purposes such as cashless transactions and e-signing contracts is expected to provide productive growth opportunities for car rental providers working in the industry.
According to study, “The UAE Car Rental, Leasing and Limousine Market Outlook to 2025 (Second Edition) – Driven by Reviving Tourism, altered Customer Preference from Public Transport to Personal Cars owing to Covid-19” renowned companies that are presently working in the UAE car rental market include Nirvana Travel and Tourism, Thrifty Rent a Car, Massar Car Rental, Hertz, Budget Rent a Car, Diamondlease, Fast Rent a Car, Leaseplan, Europcar, Diamondlease, AutoRent, Avis Limousine, National Transport, Dubai Taxi Corporation, German Limousine, Sharjah Roads and Transport Authority, Royal Falcon Limousine, Dubai Exotic Limousine, Transguard Limousine, Cityway Limousine, Elite Class Limousine Services, Insaf Limousine, Avis Limousine, Global Wings Limousine, Onak Limousine, Private Limousine, Hot Wheels Limo, Niceway Limousine and among others. Players are very focused on upgrading the size of their fleet to meet the growing demand. Therefore, the supply gap offers good opportunities for the players. Technology is also used to improve the consumer experience. These include the use of GPS, advanced music systems, and device connection. This paves the way for remarkable growth in the global car rental market over the forecast period.
Based on types of car, market can be segregated as standard car, premium car, large-sized car and ultra luxury car. Based on business type, market can be segregated as event business and non-event business. Based on source of payment, market can be segregated as corporate payments and direct from corporate. Based on duration of rental, market can be segregated as 0 to 1 month, 1 to 6 month and 6 to 12 month. In addition, based on purpose of limousine, market can be segregated as corporate and leisure.
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Increase in number of tourists, followed by lower cost of travel, rise in trend towards electric car rentals, rise in demand from the local markets, growth in digitalization, increase in preference for short-term rentals, growth in number of inbound & domestic travelers and reducing oil prices & lower per capita income are some major factors, which are responsible for growth of the market. However, various regulatory challenges and maintenance & repair work challenges may impact the market.
The UAE Car Rental Market is heavily influenced by tourists and office businesses. With the growing popularity of a technology-based platform and the introduction of new customer-centric services, the government is offering initiatives to promote the market. In addition, with the emergent economy in the United Arab Emirates, car-rental companies on high demand, car rentals have become even more accessible & sustainable. Rising populations, especially in larger cities, are leading to a lack of space, and rising fuel prices and taxes have drawn people to sustainability. Eco-friendly or environment friendly vehicles like electric vehicles (EVs) are being adopted as the UAE car rental market is moving towards the eco-friendly solutions.
Dubai is largest market for car rental & leasing services in the county. In addition, Abu Dhabi is focused on dropping its oil dependency. This is expected to expand the business environment and attract new business travelers, which will boost the car rental and leasing market. It is predicted that future of the market will be bright as a result of increase in consumer preference over luxury & hybrid vehicles with advanced technology during the forecast period.
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Ankur Gupta, Head Marketing & Communications