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. In an embodiment, the controller allocates a size and a position for each parking space in the parking area, and operates the marking system to mark each parking space to facilitate driving the vehicles into the parking spaces. Embodiments of the invention dynamically allocate parking spaces based on criteria: (1) Determine the minimum space that should be enough for the size of the car that is being currently identified for parking; and (2) Maximize 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.