South Korea Car Rental & Leasing Market Outlook to 2030

The report titled “South Korea Car Rental & Leasing Market Outlook to 2030 – By Service Type, By Vehicle Class, By Powertrain, By Booking Channel, By End-User, and By Region” provides a comprehensive analysis of the rental and leasing industry in South Korea. The report covers an overview and genesis of the industry, overall market size in terms of revenue, detailed market segmentation; trends and developments, regulatory and licensing landscape, customer-level profiling, key issues and challenges, and competitive landscape including competition scenario, cross-comparison, opportunities and bottlenecks, and company profiling of major players in the South Korea car rental & leasing market. The report concludes with future market projections based on fleet volumes, service types, powertrain adoption, regions, cause-and-effect relationships, and success case studies highlighting the major opportunities and cautions.

South Korea Car Rental & Leasing Market Overview and Size

The South Korea car rental market is valued at USD 1,594.1 million (i.e. ~USD 1.59 billion). This reflects the scale of short-term rental services (daily/weekly) and support functions (airport, urban pick-ups). The rental side is bolstered by growth in tourism receipts (inbound travelers) and domestic mobility demand, while leasing (especially long-term and corporate leases) is driven by corporates’ shift to as-a-service models and OEM captive finance arrangements.

Seoul, Busan, and Jeju dominate the South Korea rental & leasing market. Seoul is the business, financial and tourism hub—with the densest demand from both corporate and inbound travelers. Busan acts as a key port and convention city, driving rental usage in the southern region. Jeju, being a major leisure island destination with few public transport alternatives, sees disproportionately high rental demand year-round. The OEM captive finance operations (e.g. Hyundai/Kia) are also headquartered in and around Seoul, further concentrating leasing activity.

What Factors are Leading to the Growth of the South Korea Car Rental & Leasing Market:

Travel demand recovery & air connectivity intensify short-duration rental needs (airport & city stations).: International gate flows are back at scale, supplying steady renter throughput to airport stations and downtown locations. Incheon International Airport handled 70,651,000 passengers in the latest full year, restoring heavy long-haul and regional connectivity that feeds business trips and weekend leisure drives. In parallel, foreign tourist arrivals reached 16,369,629, reflecting a broad-based rebound in inbound demand that supports on-airport counters, chauffeur rentals and self-drive on Jeju/Busan corridors. The size and composition of these flows—multi-city itineraries and tightly scheduled corporate travel—translate into high vehicle turns, strong utilization, and rising attachment of add-ons such as insurance upgrades, GPS, and toll tags.

Large vehicle stock and dense urban mobility patterns sustain replacement, pooling, and corporate leasing cycles.: South Korea operates a registered road fleet of about 26.3 million vehicles, serving a national population of 51,751,065, which underpins continuous renewal of corporate fleets and opportunities for operating leases, subscription plans and medium-term rentals. Within Seoul’s multi-modal core, Line 2 alone carried 1,964,128 passengers per day, exceeding the combined daily ridership of other metropolitan systems nationwide. This density boosts demand for “first/last-mile” rentals, weekend escapes and intercity trips where car access complements transit. Fleet owners capitalize by rotating high-mileage units into rental channels and structuring leases that optimize utilization between corporate workdays and leisure peaks.

Electrification push and charging build-out open premium rental & green corporate-lease lanes.: Policy momentum is visible in budgets and hardware: the government set KRW 618.7 billion for EV charging facilities, up sharply from the prior year, while 305,309 public chargers supported 565,154 registered EVs at the last annual checkpoint. Coupled with safety enhancements and certification measures for batteries, this infrastructure enables rental/leasing firms to introduce electric-only classes, bundle workplace charging services, and sell “carbon-lite” TCO propositions to procurement teams. The result is a viable electrified segment with clear operational anchors—dense urban charging and growing intercity fast-charge corridors.

Which Industry Challenges Have Impacted the Growth of the South Korea Car Rental & Leasing Market:

Demographic headwinds reshape demand mix toward shorter contracts and off-peak utilization.: Korea’s population stood at 51,751,065, with rapid aging altering travel and commuting behavior in core cities. An expanding elderly cohort and rising shares of single-person elderly households can dampen multi-year corporate lease appetites while lifting ad-hoc rentals for medical, caregiving, and suburban errands. For fleet managers, aging translates into lower average annual mileage and more weekday daytime availability, pressuring yield unless pricing and product are adapted. Mobility packages for seniors, flexible insurance deductibles, and concierge pick-ups are increasingly needed to counteract these structural shifts.

Currency volatility raises imported-vehicle and financing exposure for lease portfolios.: Leasing residuals, parts costs and interest servicing are sensitive to foreign exchange volatility. The average KRW per US$ in 2024 was 1,363.4381, and the won touched 1,448.9 per US$ during a late-year trough, amplifying exposure for fleets heavy in imported models and dollar-linked components such as tires and electronics. Funding costs are also policy-driven, as the central bank’s base-rate path and communications keep capital-market spreads in flux. Rental and leasing operators hedge with staggered procurement and mixed-origin fleets, but volatility still impacts pricing cadence and residual-value setting.

Public-transport dominance compresses weekday self-drive demand in urban cores.: Seoul’s high-capacity rail network diverts daily trips from private car usage, concentrating car rental demand into weekends and airport traffic. Seoul Metro Line 2 carried 1,964,128 passengers per day, and combined secondary systems handled nearly 1.91 million daily passengers, indicating deep transit preference for commuting. For car rental and leasing, that means skewed utilization curves—peaks around holidays and late Fridays—requiring yield-management, one-way flexibility, and suburban station placement. Operators increasingly pivot toward B2B leasing outside core CBDs and short-haul leisure offerings aligned with rail nodes.

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

Passenger Transport Service Act (platform & rental-with-driver boundaries).: The Passenger Transport Service Act (Act No. 19387) sets market boundaries between taxi services, platform intermediation, and rental-with-driver operations. Amendments introduced structured categories for app-based services and clarified limitations on chauffeured rentals, such as minimum-time and specific pickup rules that restrict “ride-hailing via rental vans.” For rental/leasing firms, compliance dictates how chauffeur options are marketed for tourist charters and airport transfers, and influences the placement of rental stations near airports and seaports to meet lawful pickup criteria.

Personal Information Protection Act (PIPA) – strict data handling for telematics & renter privacy.: Fleet telematics, dashcams, and app-based rentals fall under the Personal Information Protection Act, which imposes rigorous standards for collection, processing, and cross-border transfer of data. Enforcement has included financial sanctions above KRW 21 billion for unlawful collection and misuse of sensitive information. Rental and leasing providers must ensure explicit consent flows, minimize video/audio data capture in vehicles, and maintain robust compliance for connected-car analytics used in damage adjudication and usage-based billing.

Compulsory motor liability insurance – binding operating prerequisite & cost pass-through.: Operating rental vehicles and leasing fleets requires continuous insurance coverage under Korea’s mandatory automobile liability framework. Non-life insurance premium inflows totaled KRW 61.3 trillion in the first half of the latest year, underscoring both the market’s scale and the regulator’s close oversight. For rental and leasing operators, compliance translates into standardized insurance offerings at counters and in corporate contracts, such as CDW/LDW, enhanced liability, and uninsured-motorist coverage. These policies ensure fleet safety while passing costs into rental yields and leasing terms.

South Korea Car Rental & Leasing Market Segmentation

By Service Type: The short-term rental holds dominance. This is because daily/weekly rentals serve both tourists and domestic travelers who require flexible mobility without ownership commitment. The airport-based and app booking infrastructure is mature, and the frequency of turn-over of vehicles allows higher yield. Many users (foreign tourists, intra-city users) prefer short durations, driving volume. The fixed overhead of branches and fleet utilization benefits short-term volume. Meanwhile, leasing and subscription are growing but remain investment-heavy and slower to scale.

By Powertrain Type: The ICE (petrol/diesel) segment remains dominant because legacy fleet replacement cycles still favor internal combustion vehicles. The existing maintenance, fueling infrastructure, lower capex, and residual value certainty support ICE fleet prevalence. The transition to hybrid/BEV is underway, but battery leasing, charging infrastructure constraints, and residual risk slow mass adoption. BEV uptake is strongest in premium segments and in captives, but not yet large enough to overtake ICE in 2024.

Competitive Landscape in South Korea Car Rental & Leasing Market

The South Korea rental & leasing market exhibits moderate concentration, led by a combination of national captives and independent operators. Key players leverage fleet scale, OEM partnerships, digital booking platforms, and airport counter networks.

Some of the Recent Competitor Trends and Key Information About Competitors Include:

LOTTE Rental: As South Korea’s largest rental operator, LOTTE Rental expanded its electric vehicle fleet in 2024 by adding over 2,000 BEVs across Seoul and Jeju branches. The company has also launched digital enhancements to its mobile app, enabling contactless booking, AI-based fleet allocation, and real-time vehicle condition checks.

SK Rent-a-Car: nown for its strong airport presence, SK Rent-a-Car signed new partnerships in 2024 with major airlines to offer bundled car rental packages. It has also invested in expanding its premium vehicle segment, catering to rising demand from business travelers and inbound tourists in Seoul and Busan.

Hyundai Capital Auto Lease: Leveraging its OEM captive advantage, Hyundai Capital increased the penetration of long-term EV leases in 2024. It introduced bundled offerings that combine vehicle financing, battery leasing, and charging solutions, positioning itself as a leader in corporate green mobility.

SOCAR: As a pioneer in South Korea’s car-sharing and subscription space, SOCAR launched AI-driven dynamic pricing in 2024, adjusting rates based on demand fluctuations and vehicle availability. The platform also rolled out new ESG initiatives, including discounted rates for EV car-sharing in metropolitan hubs.

K Car: Focused on subscription and used-car leasing, K Car expanded its subscription user base by double digits in 2024. The company strengthened its digital ecosystem by integrating predictive analytics for vehicle demand forecasting and broadening partnerships with fintech players for flexible payment solutions.

What Lies Ahead for South Korea Car Rental & Leasing Market?

The South Korea Car Rental & Leasing Market is expected to expand steadily by 2030, supported by rising inbound tourism, corporate fleet outsourcing, and the government’s strong emphasis on green mobility adoption. Growth momentum is further enhanced by Seoul’s role as a global business hub, the heavy tourist influx into Jeju, and increasing corporate reliance on operating leases and subscription-based mobility. Supportive transport infrastructure, policy-driven EV incentives, and digital distribution channels are shaping the next phase of market evolution.

Rise of Hybrid Mobility Models: The future of South Korea’s rental and leasing market will likely see the expansion of hybrid mobility models, where short-term rentals, long-term leases, car-sharing, and subscription services converge. Customers increasingly value flexibility—switching between a daily rental, a monthly lease, or a car-share depending on travel purpose. Operators are blending these models to maximize fleet utilization while addressing both leisure tourists and corporate clients with variable mobility needs.

Focus on Sustainable & Green Fleet Leasing: As companies and government bodies in South Korea prioritize sustainability and carbon reduction, there will be a sharper focus on EV and hybrid leasing solutions. Operators are expanding their green fleets, backed by more than 305,000 public charging stations nationwide and financial incentives that encourage eco-friendly adoption. Corporate contracts increasingly demand EV-based fleets to align with ESG targets, making green leasing a central growth area in the years ahead.

Expansion of Sector-Specific Leasing Solutions: There is growing demand for sector-specific leasing programs in industries such as logistics, technology, and government institutions. Logistics companies are leveraging long-term leases for light commercial vehicles to optimize delivery networks, while corporates in IT and finance demand premium fleet solutions for employee mobility. Regional tourism hubs like Jeju are witnessing tailored rental products for inbound travelers, highlighting how sector- and region-specific mobility needs are reshaping fleet composition.

Leveraging AI, Telematics & Analytics: The adoption of AI and telematics-based analytics is expected to increase, enhancing fleet management and user experience. Operators are integrating predictive analytics to optimize pricing, route efficiency, and vehicle maintenance. For customers, personalized booking recommendations, app-based loyalty programs, and digital identity verification streamline the rental process. On the corporate side, analytics-driven reporting ensures better tracking of leasing ROI, residual values, and sustainability metrics—ultimately driving higher transparency and efficiency across the ecosystem.

South Korea Car Rental & Leasing Market Segmentation

By Service Type

• Short-Term Rental (daily / weekly)

• Long-Term Rental (multi-month)

• Operating Lease

• Finance Lease

• Subscription / Car-as-a-Service

• Chauffeur / Driver Services

By Vehicle Class

• Mini / Compact Cars

• Midsize Cars

• Full-Size Cars

• SUV / MPV

• Premium / Luxury Cars

• Light Commercial Vehicles (LCVs)

By Powertrain

• ICE (Petrol)

• ICE (Diesel)

• Hybrid Electric Vehicles (HEV)

• Plug-in Hybrid Electric Vehicles (PHEV)

• Battery Electric Vehicles (BEV)

• Fuel Cell Electric Vehicles (FCEV)

By Booking Channel

• On-Airport Counters

• City / Off-Airport Branches

• Direct Online (Company App / Website)

• OTA / Aggregators (e.g., global platforms)

• Corporate Contracts

By End-User / Client Type

• Corporate Clients (Large Enterprises)

• SMEs (Small & Medium Enterprises)

• Government / Public Institutions

• Individual Domestic Travelers

• Inbound Tourists

Players Mentioned in the Report:

• LOTTE Rental

• SK Rent-a-Car

• Hyundai Capital Auto Lease

• KB Capital Auto Lease

• Hana Capital Auto Lease

• Shinhan Capital Auto Lease

• NH NongHyup Capital Auto Lease

• SOCAR (subscription / sharing)

• GreenCar (sharing)

• Avis Budget Korea

• Hertz Korea

• Sixt Korea

• K Car Subscription

• AJ Networks / AJ Rent-a-Car

• Jeju Rent-a-Car operators / regional aggregators

Key Target Audience

• Entities that are likely buyers/users of this market report include:

• Fleet investment funds / private equity & venture capital firms (mobility and automotive)

• OEM captive finance divisions (Hyundai, Kia, BMW Korea)

• Bank / auto finance arms evaluating leasing portfolios

• Large corporate mobility & procurement divisions (Samsung, LG, SK, POSCO)

• Airport authorities / airport concession planners

• Tourism promotion agencies (Visit Korea, Korea Tourism Organization)

• Charging infrastructure providers / EV infrastructure developers

• Government & regulatory bodies

Time Period:

Historical Period: 2019-2024

Base Year: 2025

Forecast Period: 2025-2030