A method, system and computer program product for allocating parking spaces for vehicles in a parking area. In one embodiment, the invention provides a system comprising a sensor system for generating output representing measurements of vehicles in the parking area, a marking system for identifying parking spaces in the parking area, and a controller for calculating parking spaces for vehicles. The controller obtains defined measurements for the vehicles in the parking area, and calculates for each of the vehicles, a respective one parking space in the parking area. Embodiments of the invention dynamically allocate parking spaces based on: (1) Determining the minimum space that should be enough for the size of the car that is being currently identified for parking; and (2) Maximizing utilization of space by preventing improper fragmentation, where because of allocating fixed size spaces to all cars, big/small/medium, fragments of space would be wasted.