Theeb Rent a Car eyes expansion across Saudi tourist cities, higher market share

Nayef Al-Theeb, CEO of Theeb Rent a Car

Theeb Rent a Car aims to pursue its geographical expansion strategy across all coastal cities in the Kingdom, in line with Vision 2030, as studies show a rise in the number of tourists and increasing demand for car rentals, CEO Nayef bin Mohammed Al Theeb told Argaam in an exclusive.

The company adopted a business profile that meets customer demand, backed by garnering a market share of 6.5% in the long-term leasing in five years only. The company also holds the biggest market share of 8.8% in the short-term leasing.

Theeb is planning to open three new short-term rental branches in Riyadh, Jazan and Dammam, in addition to a maintenance center in Jeddah. There is a great opportunity for expansion in the long-term leasing sector, where the company eyes a higher market share, he added.

Commenting on the impact of the launch of public transportation systems, Al Theeb said he does not expect a material negative impact on the company’s operations. A significant rise is likely in the number of tourists and employees looking for short-term rentals, driven by the expected growth in some non-oil sectors due to the opening of tourism channels and the decision to establish regional headquarters for foreign companies in the Kingdom.

Here’s the full interview with Nayef Al-Theeb:

Can you give us more details about the company’s incorporation, activities and branches?

Theeb Rent a Car was established in 1991 with one branch in Riyadh. It had a fleet of 50 cars in partnership with Mohammed Ahmed Al-Theeb and Hamoud Abdullah Al-Theeb. Since then, the company focused on short-term rentals and expansion across the Kingdom. The company opened 48 branches across the Kingdom to cover major cities, local and international airports in Riyadh, Jeddah, Dammam, Najran, NEOM, and etc.

In 2014, Theeb expanded its operations, starting to offer long-term leasing services. The company adopted a successful business profile that meets customer demand, which enabled it to garner a market share of 6.5% in five years only and become one of the sector’s top five players.

Theeb also sells used vehicles to support short-term and long-term leasing services.

How was the company’s performance during the COVID-19 pandemic in 2020? How could the company mitigate the impact of this crisis?

Theeb dealt strongly with the unprecedented crisis, which was suffered by the entire world and Saudi Arabia, since the coronavirus outbreak in March 2020. Undoubtedly, the crisis directly impacted the short-term leasing sector, impacting demand for the company’s services.

However, the long-term leasing sector did not witness a material impact due to the pandemic, as demand for transportation services saw a remarkable rise during that period. Moreover, the customer base in this sector is well diversified, including sectors that were excluded from movement restrictions in the Kingdom, such as the delivery services. Therefore, Theeb focused on expansion in this sector last year.

Theeb efficiently managed its fleet to mitigate the COVID-19 impact on its operations by rebalancing the short-term leasing fleet through selling some old vehicles to maintain the operating rate of the fleet and benefit from growing demand for used cars before the implementation of VAT in July 2020, which helped Theeb maintain its profitability at this difficult time.

The company is still monitoring all developments about the pandemic as well as the Kingdom’s precautionary measures, in order to efficiently manage its business and fleet and cater to customer demand.

What about Theeb expansion plans?

The company aims to expand its presence in all tourist cities, in line with Vision 2030, as studies show a rise in the number of tourists and increasing demand for car rentals. Theeb opened a new branch in AlUla and another one in NEOM, so as to be the company of choice for citizens, residents and tourists. It is planning three new short-term rental branches in Riyadh, Jazan and Dammam, in addition to a maintenance center in Jeddah.

For long-term leasing, the company is working on several expansion plans to boost its customer base in several sectors and gain a higher market share.

Theeb is also planning to develop the technical solutions provided to the customers who rent and sell vehicles, develop its customer services and enhance e-services to take advantage of the significant growth in the e-commerce and logistics industries.

Do you expect the launch of public transport systems (metro and buses) in Riyadh and other major cities to affect the sector players?

Theeb does not expect a material negative impact on the company’s operations, as the public transportation means serves retail customers, who seek alternative solutions for the limousine or express services. Meanwhile, the short-term leasing provides retail or corporate customers with solutions for one or more days, especially for tourists, businessmen and employees. Theeb expects a significant rise in the number of tourists and employees looking for renting cars for one or more days, driven by the expected growth in some non-oil sectors, such as opening tourism channels and establishing regional headquarters for foreign companies in the Kingdom.

Moreover, the company has operated in line with a geographical expansion plan, and other expansion strategies in the long-term leasing, which made Theeb well-placed in terms of diversified income sources. Accordingly, the company is able to weather the negative impact on the short-term leasing sector.

How do you see competition and what about the company’s market share?

In general, competition is positive in all sectors, as it enhances market efficiency and helps meet customer demand. Based on the latest market study, the company holds the biggest market share of 8.8% in the short-term leasing, backed by its solid infrastructure and competitive advantages.

There is still room for expansion in the long-term leasing sector, where the company eyes a higher market share.