Why will 2021 be a great year for the Car Rental Industry in UAE?

Why will 2021 be a great year for the Car Rental Industry in UAE?

Are you wondering whether this year is going to be good for the car rental industry in UAE or not? Then I have some expert explanations regarding this to share, which you may find interesting as well as useful. The United Arab Emirates car rental industry is hoped to grow at a ‘Compound annual growth rate’ of 8.5% based on revenue for the period 2020 to 2025. There are so many prominent reasons to believe 2021 will be a great year for the United Arab Emirates’s Car rental industry. Such as-

  • Consumer preference has changed due to health concerns after Covid-19.
  • New government regulations regarding public transport. 
  • Technological adoption.
  • Application of various modern aggregators to rent cars.
  • Commercial events and reviving tourism.
  • Value-added services.

Let’s discuss all of these above-mentioned factors first to make my point clearer to you. 

Impact of Covid-19

Before this global pandemic started, public transport used to be the most preferred mode of travel in the United Arab Emirates. But this Covid situation has changed so many things here. First of all, the UAE government has imposed restrictions on using public transportation. For this reason, people can not use a bus or taxi as they used to do before. Also, people are very much concerned about their health issues. As there is a huge chance of getting affected by coronavirus by traveling in public transport, most of the citizens prefer to avoid such transportation for the safety of individuals and families. As we know, if someone wants to avoid public transport due to an infectious disease, the available transportation options are- owning a car or renting a car. Here comes the need to rent cars. That is how Covid-19 is creating a major impact on the growth of the car rental industry in the United Arab Emirates.

Commercial events and reviving tourism

 Events and tourism IN UAE.

The car renting sector is very confidently assertive towards the World Expo or Expo 2020 currently hosted by Dubai in the UAE. The event will span more than 6 months, and it is expected that over 3 million people will arrive in this country from all around the world. Such a large gathering is expected to bring a positive attribute to multiple industries and the car renting ones. Especially in the Limousine section, companies are confident about their upturn due to increased pre-bookings done by the corporates for this huge event. Also, tourism is going to get back on track because of high vacancy rates. The car rental industry is expecting a great revival of tourism in 2021. The attitude of the government is positive toward this too. More arrival of people in the country means more car renting and this way the car renting industry of the United Arab Emirates will have a boost this year.

Technological adoption and modern tech aggregators 

Rent a car through app

The UAE government has been shifting towards electric/hybrid vehicles in a very strong manner. The government is providing both monetary and nonmonetary efforts in this movement. The taxi and limousine companies working in the car renting industry are going to experience a direct effect of this. For example, government-owned companies have already started transforming their fleets to either electric or hybrid ones. The privately held car renting companies are definitely going to grab this opportunity as soon as possible, too, to stay on track. This super influential movement to shift to electric and hybrid cars provides the advantage of fast-moving, which is the dream of almost every individual of this modern era, as everyone needs a few more minutes. So, shifting towards more advanced technology adoption will increase this industry’s business, and no one can have any doubt on this opinion. 

Furthermore, there are so many tech aggregators available for car renting nowadays. Consumers are no anymore interested in traditional methods of booking cars or other vehicles for rentals directly. Most of the time, smartphones do the work all over the city. This visually small change is making a huge impact on the increase of the car renting industry. 

Value-added services

Value-added services are very popular in every sector currently. People love to have extra facilities with regular service at no cost or at a minimal cost. The car renting companies are also including this to promote their business. It has become a business trend to grab the attention of consumers. Instead of heading towards a price war, the companies prefer to provide a better or superior value-added service. Such services include- sliding scale termination policy, guaranteed replacement of vehicles during servicing, pooled mileage services to corporates to after rental services, and many more. All these easy financing facilities are usually offered to both corporates as well as individual persons. Every company is competing over who can provide the most superior value-added services. This fair competition is undoubtedly developing the quality of service day by day, which is grabbing people’s attention along with reliability towards this industry. 

So, I have briefly discussed all the prime factors that are liable for this industry’s growth. As you can see, the car rental, limousine, and car leasing market in the UAE are highly influenced by the Covid-19 and customer preferences. It is observed by most of the researchers that this industry is strongly and positively recovering from the economic crisis after the pandemic. Based on the data, we can clearly notice that this market is now in a growth phase, and no sign of obstacles is visible here. Rebounding tourism and favorable government initiatives and organizing great global events like Expo 2020 and Abu Dhabi Grand Prix for Formula 1 are making it much easier for this market to grow bigger and better. I have also mentioned how positive competition among the companies is impacting the betterment of this promising industry. That’s it. Hopefully, now you know properly whether 2021 is a great year for the car rental industry and what are the primary factors behind that.


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