Saudi Arabia Car Rental And Leasing Market Size (2024 - 2029)

Saudi Arabia Car Rental And Leasing Market Analysis

The Saudi Arabia Car Rental And Leasing Market size is estimated at USD 2.30 billion in 2024, and is expected to reach USD 3.57 billion by 2029, growing at a CAGR of 9.21% during the forecast period (2024-2029).

The market for leased cars in Saudi Arabia has witnessed significant growth in recent years and is expected to continue growing during the forecast period. The market is driven by multiple factors like growing travel and tourism and supportive government regulations.

Initially, the COVID-19 pandemic negatively impacted the Saudi Arabian car leasing market as initial lockdowns and travel restrictions resulted in low demand. Several car leasing service providers found themselves in a challenging position amid suppressed demand. However, post-pandemic, as restrictions eased, demand was restored and is expected to continue growing during the forecast period.

The growth of the market can be attributed to the increasing consumer preference for private modes of transportation for leisure activities, business travels, office visits, and other travel activities. The establishment of new corporate offices is boosting the demand for leased cars as corporations find it more economical and convenient to lease vehicles than to purchase them.

The primary factor driving the growth of the market is the tourism industry, as the country hosts several holy sites, like Mecca and Medina, that witness a vast influx of tourists during festivals such as Eid Al-Fitr and Eid Al-Adha. The country generated a revenue of over USD 3,200 million in 2022 from travel and tourism.

With an increase in online platforms, car rental costs have dropped significantly, which is encouraging customers to lease cars rather than utilize taxis or public transport for their trips. Additionally, the growing e-commerce and logistics industries have also boosted the market.

However, high leasing costs, key local players still facing losses in the aftermath of the pandemic, and the availability of several alternate affordable transportation services, such as public transportation and personal vehicles, pose a challenge for market players.

Despite the challenges, the players in the market are engaged actively in various activities, like launching new facilities for customers and forming strategic partnerships to improve their market share. This positive outlook presents favorable opportunities for the market to grow over the coming years.

Saudi Arabia Car Rental And Leasing Industry Overview

Car leasing is the process by which a person uses a vehicle for a set period of time in exchange for timely rental payments.

The Saudi Arabian car leasing market is segmented by duration, vehicle type, body type, and booking type. By duration, the market is segmented into short-term leasing and long-term leasing. By vehicle type, the market is segmented into economy/budget and premium/luxury. By body type, the market is segmented into hatchback, sedan, and multi utility vehicle and sports utility vehicle. By booking type, the market is segmented into online and offline. The report offers market size and forecasts for all the abovementioned segments in value terms (USD).