The Kuwait Car Rental and Leasing Market has shown substantial growth, majorly pushed by economic development, a flourishing tourism sector, and technological advancements. Kuwait is witnessing historical growth, making car rental and leasing services increasingly important for corporate entities, expatriates, and tourists.

Kuwait Car Leasing Market was valued at 233.4 KWD Mn in FY’22 and will reach 381.4 KWD Mn in FY’27 fueled by rising demand for corporate leasing, evolving customer preferences, and the integration of digital booking platforms.

Corporate Leases- A Stable Revenue Stream of Leasing Firms

• Corporate leases are a stable source of revenue for leasing companies, majorly due to their long-term contracts that typically last 12 months or more. This stability differs very closely with spot rentals, which are short-termed. They fluctuate concerning demand on seasonal or event-driven factors.

• By leveraging long-term contracts, companies secure financial stability while adapting to the evolving needs of businesses in a dynamic competitive landscape. With a projected CAGR of 10.0% between 2022-2027, the leasing market is on a strong growth trajectory.

Reduced Default Probability

• Corporate clients pose a lower default risk than individual consumers, making them a key focus for leasing companies. This distinction plays an important role in shaping financial stability and operational strategies.
• Al Sayer Car Rental Co offers annual rental contracts with comprehensive service packages tailored for individuals, businesses, and major local and international companies. Leasing over 7,500 vehicles annually, they customize rental packages based on fleet size and duration.

Increasing Government & Military Contracts

• A significant portion of demand for car rental and leasing arises from government institutions, military projects, and oil and gas companies.
• The U.S. Army Corps of Engineers (USACE) leases vehicles, including non-tactical vehicles (NTVs), to provide transportation for personnel stationed in Kuwait. These vehicles are often intended for use by USACE employees, both military and civilian.
• Subsequently, recently the Ministry of Information released a tender to lease 30 vehicles and 2 buses with drivers and fuel. This contract is intended for hosting guests at the GCC Countries Summit, highlighting the government's ongoing need for vehicle leasing services for official events and functions.

Preferred by Expatriates

• Expatriates are a key driver of demand, as many opt for leasing vehicles rather than purchasing them. Kuwait's expatriate population is 3.29 million twice the size of its local population (1.53 million), further supporting the leasing market.
• They often change cars frequently, aligning with a culture that encourages driving newer models. As a result, Leasing provides lower monthly payments and minimal upfront costs, making it a financially appealing option.

The Kuwait Car Rental and Leasing Market is experiencing significant growth, driven by economic expansion, a booming tourism sector, and technological advancements. The industry is witnessing remarkable growth as leasing services have become essential for corporate entities, expatriates, and government institutions.

Expatriates, who outnumber locals more than 2:1, further boost leasing demand, preferring it over ownership due to flexibility and lower upfront costs. With high capital adequacy in Kuwait’s banking sector and increasing digitalization in booking platforms, the industry is ready for sustained growth.