Saudi Arabia's Car Rental Market Expands Amid Tourism Boom
Riyadh, Tuesday, 14 October 2025.
Saudi Arabia’s car rental market is growing rapidly due to increased tourism and urban development, with luxury car demand and online bookings leading the trend.
Market Growth Driven by Tourism and Urban Development
The car rental and leasing market in Saudi Arabia is currently witnessing significant growth, primarily driven by an increase in tourism and urban development projects. The market is projected to expand from approximately USD 2.52 billion in 2024 to about USD 6.08 billion by 2034, reflecting a compound annual growth rate (CAGR) of 9.20% over the forecast period [1]. This expansion is supported by the Saudi government’s focus on infrastructure enhancement and the rising internet and smartphone penetration, facilitating easier access to online services [1].
Subscription-Based Services and Online Bookings
The trend towards online bookings and subscription-based car rental services is gaining momentum, with these models expected to significantly shape the future of the industry. Subscription-based services provide consumers with flexible and cost-effective options, allowing for extended use periods without the long-term commitment of ownership. This service model is particularly attractive to both individual and corporate clients [1]. Additionally, the digital transformation in service delivery, supported by increased internet access, is streamlining the booking process, further boosting market growth [1].
Luxury and Utility Vehicles Leading Demand
There is a rising demand for luxury vehicles, driven by affluent tourists and residents seeking premium transportation options. Additionally, sports utility vehicles (SUVs) are particularly popular due to their spaciousness and comfort, appealing to families and groups during travel [1]. The diversity in vehicle offerings, from compact cars to luxury sedans and SUVs, ensures that the market caters to a wide range of consumer preferences [1].
Economic Implications and Foreign Investment
The robust growth in the car rental sector is indicative of broader economic trends in Saudi Arabia. The influx of tourists and the government’s modernization efforts are attracting foreign investments, providing a boost to the local economy [1]. The car rental market’s expansion is also a reflection of changing consumer preferences, with more individuals opting for flexible rental options over traditional vehicle ownership [1]. As such, the industry is poised to play a crucial role in the Kingdom’s economic diversification strategy, aligning with Vision 2030 objectives [1].