The Saudi Arabia Car Rental Market is anticipated to expand at a high CAGR over the forecast period.
The car rental market in Saudi Arabia is experiencing significant growth driven by diverse attributes, primarily by a change in consumer preference while travelling and an increase in tourist arrivals in the country. The country has diverse exploring sites such as Medina, Jeddah, and cultural sites like AlUla, which is consistently increasing the demand for convenient, cost-effective, and flexible car rental services. Moreover, the increase in government-led infrastructure development, and with consumer and corporate preference for on-demand transportation options like car rental, is also expected to fuel the market in the coming years.
The Saudi Arabia Car Rental Market is segmented by:
Type: The economy and executive cars are anticipated to be the major segment in the type, due to the increasing utilization in corporations, particularly in business travels, and strong preference by executives for transportation across cities. Additionally, these cars are fuel-efficient and comfortable, along with being cost-efficient, which makes them ideal for urban commuting and long-distance mobility.
Mode of Booking: The online booking segment is witnessing rapid growth in the Saudi Arabia car rental market, driven by growing urbanization and digitalization in the country, along with demand for convenience by consumers. The online Saudi Arabia platforms, such as Lumi and Theeb, provide website login and smartphone apps that offer features such as model selection, digital check-in, price comparison, and decreased waiting time, which is growing the market.
End Use Type: The self-driven segment is expected to grow at a considerable rate in the Saudi Arabian market, driven by the consumer preference for privacy and avoiding extra costs of hiring professional drivers, which is making this segment more appealing for both locals and tourists alike
Rental Category: Airport transport is predicted to be the largest segment in the rental category for this market due to the high volume of international and domestic travelers visiting the country, which increases immediate transportation requirements. Key rental market player like Hertz and Enterprise strategically hold their fleet option at airports due to the rise in air travel in the country.
Growing Push Towards Digital Convenience and Technology Integration
The increase in utilization of smartphones and internet users in the country is increasing utilization of smartphone apps and websites among consumers for streamlined booking, keyless entry. Further, the advanced features like AI and chatbots, and contactless services, are appealing to the consumer in the country.
Drivers:
Increase in Tourism and Business Travel: Tourism in the country is growing at a considerable pace, which is creating the requirement for flexible and convenient transportation options, such as car rentals, for cultural destinations and for tourism sites such as Jeddah, Makkah, and Riyadh. For instance, according to the UN Tourism report, the country witnessed a 73 percent increase in the arrival of international tourists in 2024 compared to 2019. Additionally, the international tourists from January to July 2024 were about 17.5 million arrivals, which is showing a similar momentum as seen in 2023, with 27.4 million visitors. Furthermore, the increase in domestic tourism and corporate business travellers, along with an increase in visitors who prefer private vehicles over the use of public transportation, is also promoting the Saudi Arabian market.
Increase in Transportation Services: There is a rise in the collaboration among air travel providers and car rental companies for enhancing services for customers, which increases experience and convenience in rental processes, which could lead to an improvement in customer loyalty. For instance, in May 2023, Saudia, the national airline of the country, announced a partnership with major car rental company Lumi by signing a Memorandum of Understanding (MoU), which focuses on providing exclusive benefits to AlFursan loyalty program members.
Challenges:
Digital Platform and Customer Experience Issues: The issue related to the reliability of digital platforms among consumers, which is inclusive of limited payment options for international travellers, miscommunication, and inaccurate vehicle availability coupled with hidden charges, could lead to negative reviews among users, which could limit the market growth.
The market is fragmented, with many notable players, including Hertz, Europcar, Avis Budget, Sixt, Theeb, Six Rent A Car, Enterprise Holdings, Inc., Lumi, Hanco, Ejaro, Green Motion Limited, Hello Chauffeur Limo, and Yelo, among others.
New Entry: In May 2025, Green Motion announced the launch of its car rental services in Saudi Arabia with initial operations from Jeddah, followed by Riyadh, Dammam, and Medina. It aims to provide sustainable, eco-friendly mobility which meets the standards of the Saudi Arabia Vision 2030.
Service Enhancement: In November 2024, Emirates Airlines announced the expansion of premium car rental service in Riyadh with the introduction of Chauffeur-Drive Service (CDS). It is a premium passenger service specifically for King Khalid International Airport, offering door-to-door transfer from the airport.
| Report Metric | Details |
|---|---|
| Forecast Unit | Billion |
| Study Period | 2017 to 2027 |
| Historical Data | 2017 to 2020 |
| Base Year | 2021 |
| Forecast Period | 2022 – 2027 |
| Segmentation | Type, Mode of Booking, End-Use Type, Rental Category |
| Companies |
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