Thailand Car Rental Market is Expected to Grow at a CAGR of 6.8% during 2021-2026

Thailand has made significant socio - economic progress over the last four decades, transitioning from a low-income to an upper-middle-income country in less than a generation. The car rental market in the country is extremely complicated.

Leasing companies affiliated with banks that combine hire purchase and leasing control the majority of the market. In the Thai Auto Leasing and Car Rental market, there are three types of players: finance companies, organized leasing/rental companies, and unorganized companies.

The most common customer type is large corporations, with financial leasing being one of the most profitable enterprises.

Thailand is widely acknowledged as having the most extensive road transportation network in all of Southeast Asia with more than 390,026 kilometers, of which 384,176, or 98.5%, is concrete or asphalt paved, and 66,266 km forming a national highway network connecting each region of the country.

The cost savings component for the renter, comfortability of location and use, and guaranteed parking are the major reasons that have augmented the growth in Thailand's car sharing market.

The majority of the market share is held by Thailand's organized car rental market. The organized channel is gaining traction due to the large number of fleet sizes available, which come with numerous benefits such as a technologically advanced online booking system, trained and verified drivers, and mileage-based discounts, among other things.

Furthermore, the unorganized segment primarily serves tourists who book through a travel agency, and these car rental companies work with travel agents. However, as cab aggregators enter the market and internet penetration rises, unorganized car rental players are struggling to attract direct customers.

Increasing Number of Tourists:

Thailand is one of the cheapest honeymoon destinations across the world. In 2020, the nation witnessed very smaller number of tourists due to the outbreak of virus, but by 2022, the country will regain its position as a tourist destination as people are waiting to travel, as well as business trips are also gaining traction.

In addition, to attract more tourists, Thailand government has also come up with many policies and schemes, which will increase the demand for rental cars in the country.

Inverse Relationship between New Vehicle Sales and Car Rental Demand

Vehicle sales in Thailand saw an annual decline of 21.4% to 792,146 throughout 2020. Also, the passenger cars saw a yearlong decline by 31.0% to 274,789 units.

Driven by the inverse impact of coronavirus over businesses and income, Thailand recorded a dramatic drop in new car sales from 346,244 units of cars sold in 2017 ro 274,789 units during 2020. Thus, the effect is expected to be seen in another three years till 2023 and will give a push to car rental demand.

Although car rental services are becoming more popular, there is still a lot of room for expansion. Tourism is one of the major factors driving the expansion of car rental services in Thailand.

Gained Position in Ease of Doing Business Ranking

Thailand scored 21st position in 2020, World Bank ease of doing business ranking. The country is prior to Germany and Canada with 22nd and 23rd ranks respectively making it one of the preferred choices for investors. Car rental services is also benefitted by Country’s economic growth.

Thailand car rental market is very competitive and has large number of organized and unorganized players involved. The majority of the market is dominated by leasing companies affiliated with banks that combine hire purchase and leasing.

There are three kinds of players in the Thai Auto Leasing and Car Rental market: finance companies, organized leasing/rental companies, and unorganized companies. Large corporations are the most common customer type, with financial leasing being the most profitable venture.

In Thailand Long term rental accounts the largest share of ~60% of the car rental market, with corporate customers accounting for the majority of the contribution, while short-term rental accounts for the remaining 35%, with individual use for leisure purposes.

The report discusses Car rental market on various parameters covering number of people opt for rented cars, Total Number of New Cars Sold in Thailand, Thailand Car Rental Market Segmentation by Organized and Unorganized channels, Segmentation by Self Drive vs Chauffer Driven, Segmentation by Car Rental Operators and Corporate Fleet, Long Term Rental and Short Term Rental Services and others. We have covered market revenue and forecast to 2026.

To know more about the research report, click on the link below:

Thailand Car Rental Market

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