Singapore Car Rental Market - Forecasts from 2024 to 2029

The Singapore car rental market was valued at US$1.780 billion in 2022 and is poised to reach a market size of US$2.534 billion by 2029, thereby growing at a CAGR of 5.18% during the forecast period.

In the foreseeable future, the Singapore car rental market is poised for substantial growth, attributed to factors such as the increasing expenses associated with car ownership and maintenance. This trend is significantly contributing to the market's expansion. Moreover, positive government initiatives are expected to play a pivotal role in further augmenting the nation's car rental market. Customers in the country seek consistent and high-quality experiences across various services, reflecting a changing consumer expectation paradigm. Furthermore, the car rental sector is undergoing a notable shift or disruption, driven by customer preferences for seamless applications, efficiency, and superior service. This transformation underscores the evolving dynamics within the industry, where speed and service excellence are becoming paramount considerations for consumers in their choice of rental providers. The initial impact of the COVID-19 outbreak witnessed a sharp decline in the demand for rental cars, prompting rental agencies to adopt stringent cost-saving measures. As the world gradually recovered from the pandemic and travel resumed with the aid of widespread vaccination efforts, the car rental market experienced a notable surge in demand. The challenges faced by car rental companies during the pandemic compelled them to swiftly implement strategies to reduce costs and operational overhead. Amid the initial stages of the pandemic, companies were compelled to make tough decisions such as employee layoffs, closure of rental outlets, and substantial reductions in fleet sizes. The diminished demand for secondhand cars added a layer of complexity, making it challenging for rental companies to maintain profitability. Despite these hurdles, the Singapore car rental market adapted to the evolving landscape, and the rebounding demand for rental cars signalled a positive trajectory for the industry's growth.

Growing tourism fuels the market growth.

The rise in tourism is likely to impact the car rental market in Singapore in several ways. With an increase in the number of tourists, there is a potential surge in demand for rental cars as visitors seek convenient and flexible transportation options to explore the country. Car rental services may experience heightened demand, leading to increased competition among rental companies. This could result in various offerings and promotions to attract tourists, potentially influencing pricing dynamics. Additionally, the influx of tourists might prompt car rental companies to expand their fleets and enhance services to meet the growing requirements of visitors. However, factors such as regulatory changes, economic conditions, and the availability of alternative transportation options can also play a role in shaping the overall impact of increased tourism on the car rental market in Singapore.

In 2022, the reopening of borders acted as a catalyst for the rejuvenation of the tourism sector, evident in a notable upswing in both Tourism Receipts (TR) and International Visitor Arrivals (IVA). The total TR for the year reached S$14.18 billion, marking a remarkable 649% surge compared to the preceding year. The leading contributors to this substantial increase were Indonesia with S$1.72 billion, Australia with S$1.09 billion, and India with S$1.07 billion. Collectively, these top three markets constituted 27% of the overall tourism receipts. This resurgence in tourism highlights the significant impact of border reopening measures on the economic vitality of the sector, with key markets playing a pivotal role in driving the impressive growth in receipts.

Segmentation:

By Car Type:

• Economy Cars
• Luxury Cars
• Executive Cars
• SUVs
• MUVs

By Mode of Booking:

• Online
• Offline

By Rental Category:

• Local Transport
• Airport Transport
• Outstation Transport