Prior to the pandemic, international tourists dominated overall sales of car rental in Vietnam, as many car rental outlets are located at airports and dependent on the regular flow of airline passengers. This is especially true for business arrivals.
In Vietnam, car rental witnessed a significant drop in demand due to the impact of COVID-19 in 2020. In response, local car rental companies have paid greater attention to developing their online platforms including building customer-friendly websites, in addition to focusing more on digital marketing activities including utilising social media platforms such as Facebook to promote their brand reputations and communicate with potential customers.
Combined with the gradual recovery of domestic trips taken and heightened safety concerns of Vietnamese consumers, the demand for car rental is expected to grow steadily over the forecast period with the number of transactions predicted to fully recover by 2023. To stimulate demand and attract domestic tourists, both local and international companies are likely to cooperate closely with travel intermediaries to continue to offer competitive prices with discounts of 10-20%, in addition to a greater focus on developing online platforms either through their own websites or the development of convenient smartphone apps with easy booking and payment options to increase their consumer reach with the latter also resulting in greater value share gain for credit card and debit card in terms of domestic expenditure over the forecast period.
Despite a more positive outlook for car rental over the forecast period, the category faces various challenges including external threats such as the widening availability of alternative ground transport options such as trains, hotel shuttles and an improved public transportation network. Moreover, with low cost carriers covering domestic routes, tourists can also choose to fly when travelling within the country.
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Understand the latest market trends and future growth opportunities for the Car Rental (Destination) industry in Vietnam 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 including small vans by both business and leisure users, whether from the airport or downtown locations. Small vans up to one tonne are included. For longer than average rental periods, eg rental of one month, provided the rental is sourced from the short-term rental fleet, this transaction is included. 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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