Market Trends of Vietnam Car Rental Industry
Online Segment Holds the Highest Share
- Rising internet users, coupled with the convenience of availing online services for rental services, serve as significant determinants for the growth of this market segment.
- According to the World Bank Data, the number of internet users in Vietnam was more than 80% in 2023, which acts as a major factor for the exponential rise in the share of online booking channels.
- The developments in smartphones and internet technology have brought considerable changes in the travel and transportation industry. It uses an online platform and apps to book the ride, and this helps to connect passengers and cars. For instance,
- According to the General Statistics Office of Vietnam, the average population in Hanoi amounted to approximately 8.43 million people. At least 95% of total households in Hanoi are expected to use at least one smartphone by 2025.
- Similarly, the postal-telecommunications infrastructure development plan drives the city’s digital transformation program to 2025 with a vision for 2030. The growing number of smartphone users and rising adoption of internet technology in Hanoi is attributed to the growth of mobility services in the province.
- Furthermore, online renting is increasingly preferred by consumers as they can avoid the hassle of visiting physical locations and comparing prices, car makes, and models. Online mediums also assist in expanding the choice base of consumers before deciding.
- The expanding tourism sector across Vietnam also contributes to the increasing demand for car rental services since international tourists can avail of online mediums to pre-book their desired vehicles.
- With the strategic government investment to develop and improve the region’s tourism sector, a massive demand is expected for renting cars through the online segment in the coming years.
- The government of Vietnam estimates 18 million international visitors and 120 million domestic tourists by 2025. The country is taking steps to make the tourism sector more sustainable, which may also boost its economy.
- Various companies, such as Momondo and Avis, are offering online booking services to locations like Hanoi, Ho Chi Minh City, and Da Nang to book various types of vehicles, from SUVs to hatchbacks. The other features include locking/unlocking cars via an app and watching the dash camera.
Understand The Key Trends Shaping This Market
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Commuting Holds the Highest Share
- Vietnam has witnessed an exponential rise in population growth with rising urbanization. There is a growing demand for convenient transportation options as people migrate to urban cities to seek employment for better living standards.
- People are adopting car rental services for daily commuting and shopping trips, which creates a positive impact on the market. Moreover, the focus on sustainable transportation to meet net zero emission goals is creating a consistent and growing customer base for taxi companies.
- For instance, the Vietnamese Ministry of Transport (MoT) has sought feedback on a proposed policy to boost the electric vehicle (EV) industry by offering a USD 1,000 subsidy to electric car buyers, a move that could accelerate the shift toward green, eco-friendly energy in the country.
- The various car rental companies in Vietnam, such as Grab’s Transportation Service, are making transitions in urban commuting, offering choices of diverse preferences and ensuring comfortable rides with a wide variety of vehicle choices, which allows users to select the option that best suits their needs and budget.
- The growth in technological advances, like the adoption of ride-hailing platforms, is improving the reach of taxi services in Vietnam. The various features offered by platforms include real-time tracking, driver ratings, and a secure, cashless transaction system. The other services, like quicker trips through traffic, have become an integral part of daily commuting in Vietnam.
- A local metered taxi is also considered a safe and reasonable way to travel as it is great for tourists who do not know about the area they are visiting.
- Considering the growth, new startup companies are focusing on increasing their fleet size and capacity to expand their user base and opting for funding options as well.
- Moreover, heavy investments from car rental service providers are expected to cater to the growing demand for electric vehicles by expansion of its fleets. The companies offer electric vehicles in different segments ranging from hatchbacks to high-end SUVs like BMW X5.
- For instance, in January 2024, Be Group announced that it received VND 739.5 billion (USD 40.4 million) in funding from VPBank Securities to complete its network expansion.
