KUWAIT CITY, Feb 11: A specialized economic report from an international research firm has forecasted a significant upsurge in Kuwait’s car rental and leasing market predicting a compound annual growth rate of approximately 9.8% between 2022 and 2027, citing various factors contributing to this expansion, notably tourism and advancements in technology such as the convenience of renting via applications, reports Al-Seyassah daily. According to the market study conducted by the Ken Company, the car rental market is anticipated to reach $268 million by 2027, up from $168 million in 2022. This reflects a compound annual growth rate of 9.8%, compared to the 7.6% growth rate witnessed between 2017 and 2022, with revenues reaching $116 million in 2022.

The report attributes the projected growth to the recent initiatives promoting tourism in Kuwait, which are expected to generate increased demand for car rentals. Furthermore, the proliferation of online booking platforms, mobile applications, and GPS systems is anticipated to enhance the overall rental experience, making it more accessible and efficient. Economic development and the burgeoning tourism sector are identified as key drivers influencing the car rental market in Kuwait. The report underscores the correlation between market growth and factors such as gross domestic product expansion and disposable income levels. The Kuwaiti car rental market is described as fiercely competitive, with both international and local players vying for a share of the market. This competition fosters innovation in service offerings and pricing strategies, ultimately benefiting consumers.

Additionally, government regulations aimed at ensuring safety standards, fair business practices, and environmental considerations shape the operational landscape for companies in the sector. In terms of service types, the Kuwaiti car rental market is divided into immediate rentals and limousine services, with immediate rentals holding a dominant share of approximately 95%. Short-term rentals are noted to be more cost-effective for certain users, particularly for brief periods or during holiday seasons. Several emerging trends are highlighted in the report, including the growing popularity of short-term rentals and subscription services due to changing consumer behavior and preferences.

Moreover, there is a rising interest in electric cars among rental companies, driven by environmental concerns and global trends towards sustainability. Sedans are identified as the most common type of vehicle rented, constituting 24% of the market share. This preference is attributed to the suitability of sedans for both short and long trips, appealing to individuals and families alike. Additionally, the market is segmented based on vehicle types, including SUVs, luxury cars, passenger vans, buses, pickups, and trucks.