Saudi Arabia Car Leasing Market is Expected to Recuperate With Improving Logistics Industry Growth, Women Allowed to Drive, Growth in Tourist Arrivals: Ken Research
GURUGRAM, India, April 18, 2018 /PRNewswire/ --
- Logistics, FMCG and Home Delivery, Oil & Gas sector is expected to account for over 75% of the total long term passenger and commercial cars contract value by 2022.
- Car Leasing companies in KSA are enhancing the quality of their fleet and maintains the competition through the policy of operating long term rental cars for an average period of 36 months, after which the car is usually sold through the company's used car sales department either through the public auction of quantities or through the company's individual exhibitions.
Saudi Arabia Car Leasing Industry has witnessed a New Normal post 2016 with receding commercial activities, contracting, retail and oil services and its derivatives. In the year 2017, KSA has witnessed an exit or contraction of fleet size of lot of car leasing companies with Institutional client in Oil & gas sector retracting and rethinking on cost reducing measures to counter the revenue decline due to declining oil prices.
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Saudi Arabia long term car leasing industry is expected to grow at a moderate growth rate during the forecasted period with strong tourist flows, growth in end user industries such as FMCG, Construction, logistics and other sectors. The car rental companies will have to expand the services to other regions, lower down the service prices and increase their fleet size to meet the demand and beat the competition. During the forecasted period, car rental companies are expected to upgrade their IT platform to deliver better service experience, flexibility and security to the customers for better fleet management.
Saudi Arabia have imposed value added tax on 1st January, 2018 as it plans to boost non-oil income and narrow wide fiscal deficits caused by years of low oil prices. It introduced a 5% tax on goods and services. This tax is also applicable on car hire services and these companies need to reflect on where a rental car is being plied, as this may trigger a requirement to register for VAT in other GCC states.
There are around 830 car rental companies in Saudi Arabia as of February 2018. More than 80% of the car leasing contracts is signed for an average period of 36 months. Car Dealers which operates into long term leasing manages to provide lease contracts at a relatively lower price compared to car rental companies. Major target end users for car dealers are government sector which are highly price conscious, according to the Analyst at Ken Research.
Ken Research in its latest study, "Saudi Arabia Car Leasing Market Outlook to 2022 - By Car Rental and Car Dealers, By End Users (Logistics, FMCG & Home Delivery, Oil and Gas, Construction, Government offices, Others)", suggests that the car rental companies need to continuously purchase new quantities of vehicles of different types and sizes and sell used vehicles to maintain or reduce fleet life, whenever possible. Harsh Mittal, Senior Research Analyst, Ken Research believed that keeping a modern fleet with a relatively short life rate gives the companies an important competitive advantage.
The sector is expected to witness a major boost with effect from June 2018 when Saudi women would be allowed to drive in the kingdom. Saudi government also hopes the new policy will help the economy by increasing women's participation in the workplace.
Key Topics Covered in the Report:
- Saudi Arabia Leasing Market Size
- Saudi Arabia Car Leasing Market Ecosystem
- Saudi Arabia Car Leasing Market Segmentation
- By End Users (Logistics, FMCG and Home Delivery, Oil and Gas, Construction, Government and Semi-Government Offices and Others)
- By Region (Central, Western, Eastern, Southern and Northern)
- Trends, Developments, and Restraints in Saudi Arabia Car Leasing Market
- Competitive Landscape in Saudi Arabia Car Leasing Market
- Competition Parameters in Saudi Arabia Car Leasing Market
- Market Share of Leasing and Dealers
- Competition Success Factors
- Case Studies of United International Motors (Saudi Budget) in Saudi Arabia Car Leasing Market
- Saudi Arabia Car Leasing Market Future Outlook and Projections
- By End Users (Logistics, FMCG and Home Delivery, Oil and Gas, Construction, Government and Semi-Government Offices and Others)
- By Region (Central, Western, Eastern, Southern and Northern)
- Analyst Recommendations - Bargaining Power of Customer
For more information on the research report, refer to below link:
Related Reports by Ken Research
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SOURCE Ken Research
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