The Movement Control Order introduced by the government in 2021, despite a relaxation of restrictions when virus cases were declining earlier in the year, has forced most car rental companies to remain closed during the year in an attempt to control the spread of COVID-19. This is likely to result in stronger declines in current value sales terms compared to 2020, with the number of operators, and therefore, number of cars in operation, also seeing a marginally stronger decline in 2021.
The Malaysian government has implemented a number of stimulus packages to help support tourism-related businesses, including car rental companies. For instance, January 2021 saw the PERMAI stimulus package launched to support local businesses.
Car rental demand is unlikely to noticeably improve until the end of 2022 and 2023 once consumers regain their confidence in travelling within the country and the interstate travel ban has been lifted. Strengthening consumer sentiment as a result of the country’s vaccination programme is also likely to encourage domestic travel, although lingering concerns could boost earlier demand for car rental for those not wishing to use public transport.
Domestic and international car rental players are expected to compete for consumers by offering a variety of attractive packages when borders reopen and a ban on interstate travel is completely lifted across the country. With the number of business arrivals who tend to require the use of a car upon arrival at the airport unlikely to fully recover by the end of the forecast period, car rental players will look to target individual consumers with more convenience such as app-based bookings and digital loyalty offerings, as well as more options, including car sharing, rather than relying on revenues generated by key corporate entities on business rentals.
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Understand the latest market trends and future growth opportunities for the Car Rental (Destination) industry in Malaysia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Car rental covers the short-term rental of passenger vehicles for self-drive by both business and leisure users, whether from the airport or downtown locations. Trucks and commercial vans are excluded. Car rental value covers the price of car hire to the consumer. Ancillary revenues are included, such as the hire of baby car seats, GPS navigation systems, optional roadside assistance services and collision and damage waivers. Volume is provided by the number of car hire transactions, fleet size and number of car rental operators. In underdeveloped markets, car rental companies offer chauffeur-driven cars. Most people prefer these options, due to unfamiliarity with the roads. Euromonitor International includes chauffeur-driven cars in car rental, when they concern car rental companies such as Hertz or Avis, which offer a chauffeur-driven service as an additional option. Car rental covers sales to inbound tourists and domestic tourists. i.e. from a destination point of view (also known as point of supply). For example, if a US citizen books a car rental service in France via the US offices of Hertz, the sales are attributed to Hertz France. The same applies for online sales. Car rental excludes long-term leasing, commercial vehicles, trucks and motorbikes and local car sharing schemes.
See All of Our DefinitionsThis report originates from Passport, our Car Rental (Destination) research and analysis database.
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