UAE Car Rental Leasing and Limousine Market Outlook to 2027

Market Overview:

UAE Car Rental, Leasing and Limousine Market is constantly evolving and is predicted to maintain the same growth in the forecasted period as well.  The rental, leasing, and limousine sector in the United Arab Emirates is presently experiencing a late growth period. This presents an opportunity for new companies to focus on customer-centric approaches and technical advancements.

The rental, leasing, and limousine automobile market in the United Arab Emirates is fragmented due to the presence of numerous companies, which presents opportunities as well as challenges for those involved in the industry. The UAE Car Rental, Leasing and Limousine Market is flourishing owing to its rising region for automakers because of its advantageous location, policies, expanding EV infrastructure, and low operating costs.

There are between 1500 and 1700 enterprises in the UAE automobile rental market, most of which are unorganized. Small fleet operators hold the biggest market share of 45.6%, followed by large players. One of the most developed markets in the Middle East is the automobile rental and leasing sector in the UAE, where several companies provide customers with both rental and leasing options.

With their main offices located in Dubai, the majority of the big companies in the UAE rental market cater to both individual and business clients. One of the established companies, Avis Budget has over 49 years of expertise operating worldwide fleets, is dedicated to innovation, and is advancing the direction of transportation.

UAE Car Rental, Leasing and Limousine Market Analysis

• Dubai holds a dominant position in the UAE's car rental, leasing, and limousine business due to its large concentration of government and corporate offices, as well as the substantial inflow of wealth.
• Abu Dhabi's goal of lowering its reliance on oil has resulted in a more diverse corporate climate and an increase in business traveller numbers, which has fueled the demand for car leasing.
• Thrifty, Diamond Lease, and AutoRent hold a dominant 18.3% share in the UAE rental industry, making them the top 3 companies. With 5,600 vehicles, Diamond Lease has the biggest fleet in the UAE.
• In the coming years, there will be a greater supply of rental automobiles as more domestic and international firms enter the market, such as Self Drive and Fastrack Luxury Car Rental.
• Increased demand for short-term car rental services is a result of the influx of tourists and the rapidly changing infrastructure of the United Arab Emirates.
• In the UAE limousine market, Standard limos are the popular option because of their practicality, cost, and versatility. They are comfortable and suitable for a range of occasions because of their moderate size and seating capacity.

Key Trends by Market Segment:

By Type of Vehicle: The UAE Car Rental Market is classified into three major categories: Economy, SUV, and Luxury. UAE Car Rental Market is dominated by a fleet of Economy cars with a market share of 65% owing to their availability and affordability.  As they are comfortable and capacious, SUVs are usually the vehicle of choice for travellers. Corporate reservations are best made on economy cars because of their greater availability and lower cost. The most desired economy car is the Nissan Sunny. While business clients choose to rent for periods of one to six months, depending on their needs, tourists usually reserve rentals for a week or a month.

By Type of End Users: End-users of the UAE Car Leasing Market are categorized into three important categories Commercial, Private, and Government. Commercial clients are the major drivers for the leasing companies in UAE amounting 65% of the total market share. The reason behind their dominance of commercial users is business tourists who lease a vehicle for more than 1 year till the completion of their project in the country.Additionally,Companies typically lease cars in Dubai for three years to facilitate the commute of a large number of their employees.

By Type of Vehicle: The UAE Car Rental, Leasing, and Limousine Market is segmented into seven regions Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah. Among the seven regions, Dubai is leading the UAE Car Rental, Leasing, and Limousine Market with 56% of the market share. Given that it has the largest concentration of government and business offices as well as large financial inflows, Dubai leads the market for car rental, leasing, and limousine market followed by Abu Dhabi, Sharjah, and others.

Competitive Landscape:

Major Players in UAE Car Rental, Leasing and Limousine Market

• The majority of the leading companies in the UAE rental industry have their main headquarters in Dubai and cater to both individual and corporate clients.
• The UAE government has implemented incentives, including as tax exemptions and lower fees, to encourage the purchase of electric vehicles. However, ICE vehicles still hold more than 90% of the market share in the UAE rental industry.
• With 13,800 vehicles, Emirates Transport leads the UAE car leasing market in terms of fleet size. In the UAE car leasing market, the top 3 companies, Emirates, Thrifty Rent a Car, and Leaseplan, hold a majority stake of approximately 25%.
• In the UAE car limousine market, Private Limousine has the largest fleet size with 200 cars. In the UAE car leasing market, the top 3 companies, Private Limousine, Avis, and Hot Wheels, hold a combined market share of more than 10%. In this market, there are both international businesses like Avis and regional ones like Hot Wheels.
• About 70% of the limousine market is dominated by small fleet owners, making it an extremely competitive industry to compete in. Due to their modest fleet sizes and face-to-face interactions, these smaller players are able to provide more individualized services.

Recent Developments:

• UAE limousine firms have been emphasizing the use of cutting-edge technology in both their vehicles and services. Some of these to improve the whole customer experience while booking and riding the limousine include real-time GPS tracking, online booking platforms, mobile applications with integrated services, etc.
• In the UAE as well as other regions of the world, there has been an increase in the focus on environmental consciousness and sustainability. To attract clients who are even more environmentally aware, several limousine companies are moving toward sustainability by adding electric and hybrid vehicles to their fleets.
• The demand for limo services has grown significantly in Dubai. This is brought on by an increase in corporate organizations, business travellers, hotels, tour companies, and visitors, among other factors. Many of these limo businesses have partnerships with high-end hotel chains and corporate entities to provide limo services for wealthy customers.
• Many events, like the Dubai Air Show, Formula One Racing, Dubai Expo, and others, use limousine services. The need for limousine services among prestigious guests, actors, performers, business travellers, etc., will rise coupled with the numerous events that are scheduled for the next few years.

Future Outlook:

• The market will grow at a CAGR of 6.4% during 2022-2027 owing to factors such as the Increase in Tourism and Business Travel along with Rising Expatriate Population and Infrastructure Development.
• The government has set a target of 40 million tourists by 2031, with the tourism sector expected to generate $123 billion in income, as per the UAE Tourism Strategy 2031. The market for taxi aggregators will immediately profit from the growing number of tourists who choose app-based transportation because of its accessibility and convenience.
• The Road Transport Authority (RTA) of Dubai announced goals in 2023 to switch from street-hailing to e-hail services, to achieve an 80% e-hail acceptance rate in the coming years. The administration and the well-known taxi aggregator Careem worked together on this, which will increase income for taxi aggregators in the United Arab Emirates.
• The UAE's stance as a luxury vacation destination and its fast-growing affluent population are driving demand for high-end, custom-tailored premium e-hailing services. For example, ZED, a high-end e-hailing service, was launched in 2023, especially catering to wealthy customers – offering them personalized ride-hailing experiences.