Oman Car Rental and Leasing Market Outlook to 2029

By Market Structure, By Rental Duration, By Types of Vehicles, By Customer Segments, and By Region

  • Product Code: TDR0034
  • Region: Middle East
  • Published on: September 2024
  • Total Pages: 110

Report Summary

The report titled “Oman Car Rental and Leasing Market Outlook to 2029 - By Market Structure, By Rental Duration, By Types of Vehicles, By Customer Segments, and By Region.” provides a comprehensive analysis of the car rental and leasing market in Oman. The report covers an overview and genesis of the industry, overall market size in terms of revenue, market segmentation; trends and developments, regulatory landscape, customer level profiling, issues and challenges, and comparative landscape including competition scenario, cross comparison, opportunities and bottlenecks, and company profiling of major players in the car rental and leasing market. The report concludes with future market projections based on sales revenue, by market, vehicle types, region, and success case studies highlighting the major opportunities and cautions.

Oman Car Rental and Leasing Market Overview and Size

The Oman car rental and leasing market reached a valuation of OMR 200 Million in 2023, driven by a 15% increase in tourist arrivals and a 10% growth in the expatriate population. The demand for flexible and convenient transportation solutions has seen a steady rise, particularly in the context of Oman’s expanding tourism sector. The market is dominated by key players such as Europcar, Budget Rent a Car, Avis Oman, Thrifty Car Rental, and Hertz Oman. These companies control approximately 60% of the market, leveraging their extensive fleet options, widespread service networks, and strong brand reputation.

In 2023, Budget Rent a Car launched a new digital platform, which led to a 25% increase in online bookings, enhancing customer experience and streamlining the rental process. This digital shift reflects the broader trend in Oman, where online transactions in the car rental sector have grown by 18% year-on-year. Muscat, which accounts for 40% of the market, and Salalah, with 25%, are key markets due to their high tourist traffic and well-developed infrastructure.

Market Size for Oman Car Rental and Leasing Industry on the Basis of Revenues in USD Bn, 2018-2023

Source: TraceData Research Analysis 

What Factors are Leading to the Growth of Oman Car Rental and Leasing Market:

  • Tourism Growth: The influx of tourists to Oman, especially during peak seasons, has significantly driven demand for rental cars. In 2023, tourist arrivals reached approximately 4.3 million, marking a 12% increase from the previous year. Many of these tourists opted for rental services to explore the country's diverse landscapes and cultural sites. The tourism sector's growth, bolstered by government initiatives like the “Visit Oman” campaign, is a major driver for the car rental market, contributing to a 15% increase in rental transactions.

  • Expanding Expatriate Population: Oman’s expatriate community, particularly in cities like Muscat, has grown by 8% in recent years. As of 2023, expatriates make up approximately 45% of Oman’s total population. This demographic often prefers leasing vehicles due to the flexibility and cost-effectiveness it offers compared to purchasing a car. The rise in expatriates has led to a corresponding 10% increase in demand for long-term leasing services, particularly among corporate clients and individuals looking for extended stays.

  • Corporate Demand: The growing business environment in Oman, fueled by increasing foreign investments and expanding corporate activities, has significantly boosted the demand for corporate car rental and leasing services. In 2023, corporate rentals accounted for approximately 35% of the total car rental market, reflecting the importance of this segment. This growth is attributed to the rising number of multinational companies establishing operations in Oman, which often require fleet services for their employees and business needs.

Which Industry Challenges Have Impacted the Growth of Oman Car Rental and Leasing Market:

  • High Operational Costs: The car rental and leasing market in Oman faces significant challenges due to high operational costs, including vehicle maintenance, insurance, and compliance with regulatory standards. According to industry data, approximately 40% of rental companies report that these costs have reduced their profit margins, particularly smaller operators who struggle to compete with larger, established firms.

  • Regulatory Hurdles: Stringent regulations regarding vehicle inspections, safety standards, and emissions can limit the availability of certain vehicles, particularly older models. In 2023, around 18% of rental vehicles failed to meet the new emission standards, leading to a reduction in fleet size for many operators. These regulations have also increased the costs associated with maintaining a compliant fleet, putting pressure on rental companies to either upgrade their vehicles or face penalties.

  • Competitive Pressure: The Omani car rental market is highly competitive, with both local and international players striving to capture market share. This competition has led to aggressive pricing strategies, which, while beneficial to consumers, have squeezed profit margins for rental companies. Approximately 35% of companies in the market have reported difficulties in maintaining profitability due to the intense price competition, especially in the economy car segment.

What are the Regulations and Initiatives which have Governed the Market:

  • Vehicle Inspection Regulations: The Omani government mandates regular inspections for rental vehicles to ensure they meet specific safety and environmental standards. These inspections are required annually and focus on critical aspects such as brakes, lights, and emissions. In 2023, approximately 80% of rental vehicles passed the inspection on their first attempt, reflecting a high level of compliance among market players.

  • Import Restrictions on Rental Vehicles: The government enforces strict regulations on the importation of vehicles for rental purposes, including a maximum age limit of 3 years for most vehicles. Additionally, all imported vehicles must comply with GCC safety and emissions standards. In 2023, imports of rental vehicles decreased by 10% due to stricter enforcement of these regulations, pushing rental companies to focus on maintaining and upgrading their existing fleets.

  • Government Support for Sustainable Transportation: To encourage the adoption of environmentally friendly vehicles, the Omani government has introduced incentives for hybrid and electric vehicles (EVs) in the rental market. These include reduced import duties, tax exemptions, and subsidies for EV infrastructure. In 2023, EVs accounted for about 2% of the total rental fleet, a number that is expected to increase as these incentives become more widely utilized.

What is the current structure for Oman Car Rental Market

By Type of Cars: In Oman, sedans and SUVs are the most popular vehicle choices due to their affordability and comfort. In addition to being less expensive to maintain, small to medium-sized automobiles are often easier to drive, park, and handle. The majority of cars in Oman car rental market are leased by lower-level management, meaning that budget cars are more common than luxury cars due to their lower prices. 

Market Segmentation of Oman Car Rental Market by Type of Cars on the Basis of Fleet Size in Percentage, 2023

By End user: The car rental market in Oman primarily consists of individual end users, primarily from tourism and travel industries. The most common industries for leasing are manufacturing and facility management firms. These individuals often use rented cars for daily commutes, while businesses rent cars for operational needs like staff transportation. The market includes private, commercial, government, and semi-government users.

Market Segmentation of Oman Car Rental Market by End Users on the Basis of Fleet Size in Percentage, 2023

What is the Current Structure for Oman Car Leasing Market

By Type Of Cars: SUV-type cars dominated the Oman car leasing market and contributed the majority of the market share by fleet size, followed by economy-class and luxury cars in 2023 due to their road presence. The economy car is also highly demanded because of its affordable price.

Market Segmentation of Oman Car Leasing Market by Type of Cars on the Basis of Fleet Size in Percentage, 2023

By End Users: With a market share of around good presential, property management services which are widely used for official purposes by facility management businesses they led the Oman leasing market fleet in 2023. The industrial sector, food services, logistics, oil and gas, government & associations, and others followed them.

Market Segmentation of Oman Car Leasing Market by End Users on the Basis of Fleet Size in Percentage, 2023

Source: TraceData Research Analysis

The above percentage share is just for representation. The actual numbers will be different from actual ones

What is the Current Structure for Oman Limousine Car Market

By Number of Airport Booking: Oman automobile rental industry is dominated by bookings made at airports by the number of fleets in 2023, driven by bookings from tourists and travellers. Non-airport bookings are generally opted for by visitors and for special occasions. 

Market Segmentation for Oman Limousine Car Market by number of airport bookings on the Basis of Revenues in Percentage, 2023

By Types of Cars: Most of the market share in terms of fleet size is held by the standard limousine car in the Oman limousine industry. The limousine service sector is always changing; therefore, companies looking to enter or grow within it can find it helpful to have a thorough feasibility study. Usually, a study like this would include market analysis.

Market Segmentation of Oman Limousine Car Market by Type of Cars on the Basis of Revenues in Percentage, 2023

Source: TraceData Research Analysis

The above percentage share is just for representation. The actual numbers will be different from actual ones

Competitive Landscape in Oman Car Rental and Leasing Market

The Oman car rental and leasing market is moderately concentrated, with a mix of major international players and prominent local firms dominating the space. However, the entrance of new companies and the expansion of digital platforms have diversified the market, offering consumers a wider range of choices and services.

Name

Founding Year

Headquarters

Budget Rent A Car Oman

1970

Muscat, Oman

Europcar Oman

1981

Muscat, Oman

Hertz Oman

1918 (Operations in Oman)

Muscat, Oman

Avis Oman

1970

Muscat, Oman

Thrifty Car Rental Oman

1958 (Operations in Oman)

Muscat, Oman

National Car Rental Oman

1947 (Operations in Oman)

Muscat, Oman

Sixt Oman

1912 (Operations in Oman)

Muscat, Oman

Mark Tours Car Rental

1984

Muscat, Oman

Oman National Transport Co.

1972

Muscat, Oman

Apex Transports Oman

2004

Muscat, Oman

Some of the recent competitor trends and key information about competitors include:

  • Europcar: One of the leading international rental companies, Europcar reported a 12% increase in rental volumes in Oman in 2023. The company’s focus on expanding its fleet of eco-friendly vehicles and enhancing customer service through digital platforms has contributed to its strong market position.

  • Budget Rent a Car: Known for its affordable pricing and extensive service network, Budget Rent a Car saw a 15% increase in bookings in 2023, driven by its new digital booking platform that offers customers a seamless rental experience. The platform has been particularly popular among younger travelers and expatriates.

  • Avis Oman: Avis continues to be a preferred choice for corporate clients, reporting a 10% growth in long-term leases in 2023. The company’s emphasis on providing tailored leasing solutions for businesses, coupled with its robust after-sales service, has reinforced its leadership in the corporate segment.

  • Thrifty Car Rental: Thrifty has seen a 14% rise in rentals, particularly in the luxury vehicle segment, catering to high-end tourists and business executives. The company's strategy of offering premium vehicles at competitive prices has resonated well with its target market.

  • Mark Tours Rent a Car: A prominent local player, Mark Tours Rent a Car has leveraged its deep understanding of the local market to expand its fleet by 20% in 2023. The company has focused on enhancing its customer service and increasing its presence in key tourist destinations like Salalah and Nizwa.

Market Share of Key Players in Oman Car Rental Market on the Basis of Fleet Size/Revenues in Percentage, 2023
Market Share of Key Players in Oman Car Leasing Market on the Basis of Revenues/Fleet Size in Percentage, 2023
Market Share of Key Players in Oman Limousine Car Rental Market on the Basis of Revenues in Percentage, 2023

What Lies Ahead for Oman Car Rental and Leasing Market?

The Oman car rental and leasing market is projected to grow steadily by 2029, exhibiting a healthy CAGR during the forecast period. This growth is expected to be driven by the continued expansion of the tourism sector, increasing expatriate population, and rising demand for corporate leasing solutions.

  • Shift Towards Sustainable Mobility: With the global focus on sustainability, there is anticipated to be a gradual increase in the availability and demand for electric and hybrid vehicles in the Omani rental market. This trend is supported by government incentives for eco-friendly vehicles and a growing consumer preference for sustainable transportation options. The adoption of green energy initiatives is expected to reshape the market landscape, with more companies adding eco-friendly vehicles to their fleets.

  • Integration of Technology: The integration of advanced technologies such as AI and big data analytics in fleet management, customer service, and pricing processes is expected to enhance operational efficiency and provide customers with more personalized and transparent services. These technological advancements will not only streamline the rental process but also improve customer satisfaction, making the market more competitive and user-friendly.

  • Expansion of Digital Platforms: The rise of online booking platforms and mobile applications is transforming the car rental and leasing industry in Oman. These platforms offer customers the convenience of real-time booking, vehicle selection, and payment options, which is expected to drive market growth. The ongoing digital transformation will also enable companies to reach a broader audience and increase customer engagement.

  • Growth in Long-Term Leasing: The market is expected to see a significant increase in long-term leasing, particularly among expatriates and corporate clients who prefer the flexibility and lower upfront costs compared to vehicle ownership. This trend is likely to be further supported by the economic benefits and convenience associated with long-term leasing arrangements.

  • Focus on Customer-Centric Services: As competition intensifies, companies in the Oman car rental and leasing market are expected to focus more on enhancing customer service and offering value-added services such as 24/7 roadside assistance, vehicle delivery and pickup, and personalized rental packages. This customer-centric approach is anticipated to play a critical role in retaining and attracting clients.

Future Outlook and Projections for Oman Car Rental and Leasing Market on the Basis of Revenues in USD Billion, 2024-2028

Source: TraceData Research Analysis

 

Oman Car Rental and Leasing Market Segmentation:

Car Rental Market

 Type of Cities 

  • Muscat

  • Ouorum

  • Saiq

  • Seeb

  • Musanah

  • Others

Types of Cars 

  • Economy

  • SUV

  • Luxury

Type of End users 

  • Individual 

  • Corporate

By Duration

  • 0-1 Month

  • 1-6 Month 

  • 6- 12 month

Car Leasing Market

 Type of Cities 

  • Muscat

  • Ouorum

  • Saiq

  • Seeb

  • Musanah

  • Others

Types of Cars 

  • Economy

  • SUV

  • Pick-ups

  • Luxury

Type of Car Leased 

  • Individual 

  • Corporate

By Duration

  • 1 years

  • 2 years

  • 3 years 

  • 6- 12 month

By End User 

  • Facility Management

  • Industrial Sector

  • Food Services

  • Logistics

  • Oil & Gas

  • Government & Associations and others

Car Limousine Market

 Type of Cities 

  • Muscat

  • Ouorum

  • Saiq

  • Seeb

  • Musanah

  • Others

Types of Cars 

  • Economy

  • SUV

  • Pick-ups

  • Luxury

By Airport

  • On Airport

  • Off Airport

Players Mentioned in the Report:

  • Budget Rent A Car Oman

  • Europcar Oman

  • Hertz Oman

  • Avis Oman

  • Thrifty Car Rental Oman

  • National Car Rental Oman

  • Sixt Oman

  • Mark Tours Car Rental

  • Oman National Transport Co.

  • Apex Transports Oman

Key Target Audience:

  • Car Rental Companies

  • Leasing Companies

  • Corporate Clients

  • Tourists and Expats

  • Regulatory Bodies (e.g., Ministry of Transport and Communications)

  • Research and Development Institutions

Time Period:

  • Historical Period: 2018-2023

  • Base Year: 2024

  • Forecast Period: 2024-2029

Report Coverage

1. Executive Summary

2. Research Methodology

3. Ecosystem of Key Stakeholders in Oman Car Rental, Leasing and Limousine Market

4. Value Chain Analysis

4.1. Value Chain Process- Role of Entities, Stakeholders, Gross and Net Margins, and challenges

4.2. Revenue Streams for Oman Car Rental and Leasing Market

4.3. Business Model Canvas for Oman Car Rental and Leasing Market

5. End User Analysis for Oman Car Rental and Leasing Market

5.1. NDP Analysis for Oman Car Rental and Leasing Market

5.2. Decision Making Process for Oman Car Rental and Leasing Market

5.3. Size and Demand Preference for each End user entities including Individuals and Corporates 

5.4. Gap Analysis Framework for Oman Car Rental and Leasing Market

6. Market Attractiveness for Oman Car Rental, Leasing and Limousine Market

7. Supply-Demand Gap Analysis

8. Market Size for Oman Car Rental, Leasing and Limousine Market based on

8.1. Revenues, 2018-2024P

8.2. Number of Fleets, 2018-2024P

9. Market Segmentation for Oman Car Rental, Leasing and Limousine Market Basis

9.1. By Segment (Rental, Leasing and Limousine Market), 2018-2023

10. Oman Car Rental Market

10.1. Market Size for Oman Car Rental Market based on

10.1.1. Revenues, 2018-2024P

10.1.2. Number of Fleets, 2018-2024P

10.2. Market Segmentation for Oman Car Rental Market Basis

10.2.1. By End Users, 2018-2024P

10.2.2. By Mode of Booking, 2018-2024P

10.2.3. By Region, 2018-2024P

10.2.4. By Duration, 2018-2024P

10.2.5. By Engine Type, 2018-2024P

10.3. Future Market Size for Oman Car Rental Market based on

10.3.1. Revenues, 2024-2029

10.3.2. Number of Fleets, 2024-2029

10.4. Future Market Segmentation

11. Oman Car Leasing Market

11.1. Market Size for Oman Car Leasing Market based on

11.1.1. Revenues, 2018-2024P

11.1.2. Number of Fleets, 2018-2024P

11.2. Market Segmentation for Oman Car Leasing Market Basis

11.2.1. By End Users, 2018-2024P

11.2.2. By Duration of Leasing, 2018-2024P

11.2.3. By Region, 2018-2024P

11.3. Future Market Size for Oman Car Leasing Market based on

11.3.1. Revenues, 2024-2029

11.3.2. Number of Fleets, 2024-2029

11.4. Future Market Segmentation for Oman Car Leasing Market

12. Oman Limousine Market

12.1. Market Size for Oman Limousine Market based on

12.1.1. Revenues, 2018-2024P

12.1.2. Number of Fleets, 2018-2024P

12.2. Market Segmentation for Oman Limousine Market Basis

12.2.1. By Purpose, 2018-2024P

12.2.2. By Type of Vehicle, 2018-2024P

12.2.3. By Region, 2018-2024P

12.3. Future Market Size for Oman Limousine Market based on

12.3.1. Revenues, 2024-2029

12.3.2. Number of Fleets, 2024-2029

12.4. Future Market Segmentation for Oman Limousine Market

13. Industry Analysis for Oman Car Rental, Leasing and Limousine Market

13.1. Trends and Developments

13.2. Growth Drivers

13.3. SWOT Analysis

13.4. Issues and Challenges

13.5. Government Regulations

13.6. Technology Upgradation

14. Opportunity Matrix for Oman Car Rental, Leasing and Limousine Market - Presented with the help of Radar Chart

15. PEAK Matrix Analysis

16. Competitor Analysis

16.1. Benchmark of Key Competitors based on 15-20 operational and financial indicators 

16.2. Market Share of Key Competitors in Oman Car Leasing Market Basis Number of Fleets, 2023

16.3. Market Share of Key Competitors in Oman Car Rental Market Basis Number of Fleets, 2023

16.4. Market Share of Key Competitors in Oman Limousine Market Basis Number of Fleets, 2023

16.5. Strength and Weakness

16.6. Operating Model Analysis Framework

16.7. Gartner Magic Quadrant

16.8. Bowman’s Strategic Clock for Competitive Advantage

17. Outlook and Projections for Oman Car Rental Leasing and Limousine Market

17.1. Future Market Size, 2024-2029

17.2. Future Market Segmentation, 2029

17.3. Analyst Recommendation

17.4. Opportunity Analysis

Research Methodology

Step 1: Ecosystem Creation

  • Map the ecosystem and identify all the demand-side and supply-side entities for the Oman Car Rental and Leasing Market. Based on this ecosystem, we will shortlist leading 5-6 rental companies in the country based on their fleet size, financial information, and market share.

  • Sourcing is conducted through industry reports, multiple secondary sources, and proprietary databases to perform desk research and gather industry-level information.

Step 2: Desk Research

  • Subsequently, we engage in an exhaustive desk research process by referencing diverse secondary and proprietary databases. This approach enables us to conduct a thorough analysis of the market, aggregating insights such as sales revenues, number of market players, price levels, demand trends, and other relevant variables. We supplement this with detailed examinations of company-level data, relying on sources such as press releases, annual reports, financial statements, and similar documents. This process aims to construct a foundational understanding of both the market and the entities operating within it.

Step 3: Primary Research

  • We initiate a series of in-depth interviews with C-level executives and other stakeholders representing various Oman Car Rental and Leasing Market companies and end-users. This interview process serves a multi-faceted purpose: to validate market hypotheses, authenticate statistical data, and extract valuable operational and financial insights from these industry representatives. A bottom-up approach is undertaken to evaluate the fleet size and rental volumes for each player, thereby aggregating to the overall market.

  • As part of our validation strategy, our team conducts disguised interviews wherein we approach each company under the guise of potential customers. This approach enables us to validate the operational and financial information shared by company executives, corroborating this data against what is available in secondary databases. These interactions also provide us with a comprehensive understanding of revenue streams, value chains, processes, pricing strategies, and other factors.

Step 4: Sanity Check

  • Bottom-up and top-down analysis, along with market size modeling exercises, is undertaken to assess the accuracy and consistency of the data collected. This sanity check process ensures that the market estimates and forecasts are robust and reliable.

FAQs

01 What is the potential for the Oman Car Rental and Leasing Market?

The Oman car rental and leasing market is positioned for steady growth, projected to reach a valuation of OMR 250 Million by 2029. This growth is driven by factors such as the expanding tourism sector, increasing expatriate population, and rising demand for corporate leasing solutions. The market's potential is further enhanced by the government's focus on promoting sustainable transportation and the growing adoption of digital booking platforms.

02 Who are the Key Players in the Oman Car Rental and Leasing Market?

The Oman Car Rental and Leasing Market features several key players, including Europcar, Budget Rent a Car, and Avis Oman. These companies dominate the market due to their extensive fleet options, strong brand presence, and comprehensive service offerings. Other notable players include Thrifty Car Rental, Hertz Oman, and local companies like Mark Tours Rent a Car.

03 What are the Growth Drivers for the Oman Car Rental and Leasing Market?

The primary growth drivers include the increasing number of tourists visiting Oman, the growing expatriate population, and the expanding business environment which boosts demand for corporate leasing services. Additionally, the rise of digital platforms and the government's support for eco-friendly vehicles are expected to significantly contribute to the market's growth over the forecast period.

04 What are the Challenges in the Oman Car Rental and Leasing Market?

The Oman Car Rental and Leasing Market faces several challenges, including high operational costs associated with vehicle maintenance and compliance with stringent regulatory standards. Competitive pressure from both local and international players, as well as the need for continuous fleet upgrades to meet evolving customer preferences, also pose significant barriers to market growth.

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