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Car Rentals - Nigeria

Nigeria

By 2024, it is projected that the revenue in the Car Rentals market in Nigeria will reach US$0.75bn.
Furthermore, it is expected to display an annual growth rate of 7.46%, resulting in a projected market volume of US$1.00bn by 2028.
The number of users in this market is expected to amount to 17.17m users by 2028, with user penetration projected to be 5.6% in 2024 and 6.8% by 2028.
The average revenue per user (ARPU) is expected to be US$58.17.
It is noteworthy that 69% of total revenue in this market is anticipated to be generated through online sales by 2028.
It is interesting to note that when compared globally, the majority of revenue in the Car Rentals market will be generated in United States, with an expected revenue of US$30,440m in 2024.
Despite challenges such as poor road infrastructure and security concerns, car rental companies are thriving in Nigeria due to the high demand for business and leisure transportation options.

Key regions: China, South America, Germany, United States, Malaysia

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Analyst Opinion

The Car Rentals market in Nigeria has been experiencing significant growth in recent years.

Customer preferences: One of the key reasons for this growth is the increasing demand for car rentals among both domestic and international travelers. Many customers prefer to rent a car instead of relying on public transportation or taxis, as it provides them with more flexibility and convenience. Additionally, car rentals are popular among business travelers who require a vehicle for their meetings and appointments.

Trends in the market: One of the major trends in the car rentals market in Nigeria is the rise of online booking platforms. These platforms have made it easier for customers to compare prices, choose from a wide range of vehicles, and make reservations. This has led to increased competition among car rental companies, as they strive to offer competitive prices and improve their services to attract customers. Another trend in the market is the growing popularity of self-drive car rentals. This allows customers to rent a car and drive themselves, without the need for a chauffeur. This trend is particularly popular among younger customers who value independence and prefer to have control over their travel experience.

Local special circumstances: Nigeria is a country with a diverse landscape and a growing tourism industry. From bustling cities to beautiful natural attractions, there is a lot to explore in the country. This has led to an increase in both domestic and international tourism, which in turn has driven the demand for car rentals. Additionally, Nigeria has a large population of expatriates and foreign workers who often require transportation for their daily commute or weekend trips. This has created a steady demand for car rentals in the country.

Underlying macroeconomic factors: The Nigerian economy has been experiencing steady growth in recent years, which has resulted in an increase in disposable income among the population. This has made car rentals more affordable for many Nigerians, leading to an increase in demand. Furthermore, the government has been investing in infrastructure development, including road construction and improvement projects. This has made traveling by car more convenient and has contributed to the growth of the car rentals market. In conclusion, the car rentals market in Nigeria is experiencing significant growth due to the increasing demand from both domestic and international travelers. Customer preferences for flexibility and convenience, as well as the rise of online booking platforms and self-drive rentals, have contributed to this growth. The country's diverse landscape, growing tourism industry, and the presence of expatriates and foreign workers have also created a steady demand for car rentals. The steady growth of the Nigerian economy and government investments in infrastructure development have further fueled the growth of the market.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on bookings, revenues, and online shares of car rental services.

Modeling approach:

Market sizes are determined through a bottom-up approach, building on a specific rationale for each market. As a basis for evaluating markets, we use financial reports, third-party studies and reports, federal statistical offices, industry associations, and price data. To estimate the number of users and bookings, we furthermore use data from the Statista Consumer Insigths Global survey. In addition, we use relevant key market indicators and data from country-specific associations, such as demographic data, GDP, consumer spending, internet penetration, and device usage. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, ARIMA, which allows time series forecasts, accounting for stationarity of data and enabling short-term estimates. Additionally, simple linear regression, Holt-Winters forecast, the S-curve function and exponential trend smoothing methods are applied.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change.