May 28, 2024
car rental Market

Mexico Car Rental Market Is Estimated To Witness High Growth Owing To Increasing Tourism

The Mexico car rental market is estimated to be valued at US$ 1220.02 Mn in 2023 and is expected to exhibit a CAGR of 10% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
The Mexican car rental market provides vehicles on rent to customers for both leisure and business purposes. Car rental services are majorly used by tourists visiting the county for sightseeing or business trips. The key vehicles types offered for rent include economy cars, compact cars, mid-sized cars, luxury cars, SUVs, and others.

Market Dynamics:
The Mexico car rental market is driven by increasing tourism activities in the country. Mexico receives a large number of international tourists every year owing to its scenic beach locations, archaeological sites, vibrant culture, and cuisine. According to Mexican Ministry of Tourism, the number of international tourist arrivals in Mexico grew from over 39 million in 2017 to more than 42 million in 2019. This rising influx of tourists is fueling the demand for rented vehicles for local transportation. Furthermore, an improving economy of Mexico coupled with increasing disposable incomes is increasing business travels, which is further supporting the car rental market growth. Additionally, developing infrastructure such as highways and airports is making inter-city commute easier, thus augmenting the demand.

SWOT Analysis
Strength: The Mexico Car Rental Market benefits from a growing tourism industry in the country. The increasing arrivals of international tourists is driving the demand for rental cars. Furthermore, strong economic growth is increasing disposable income levels which is encouraging domestic travel.
Weakness: Lack of infrastructure such as roads and highways in certain regions of Mexico poses operational challenges for rental car companies. Additionally, security issues in some parts of the country may discourage travelers.
Opportunity: Growth in business travel within Mexico as economic activity increases presents an opportunity for rental car companies to target the corporate segment. Furthermore, urbanization is leading to traffic congestion in major cities, making car rental services more attractive for commute.
Threats: Strict emission regulations by the government threaten the use of older fleet vehicles. Rising fuel costs also impact the operating costs of rental car companies.

Key Takeaways:
Global Mexico Car Rental Market Demand is expected to witness high growth, exhibiting CAGR of 10% over the forecast period, due to increasing international tourist arrivals. Mexico has experienced strong growth in tourism recently, with the number of visitors rising annually. This has created more demand for rental cars from tourists.

Regional analysis:
The Mexico City region dominates the Mexico Car Rental Market, accounting for over 30% share due to the high concentration of business and tourism activities. Major international airports in Mexico City receive sizable number of domestic as well as international travelers each year. Moreover, urbanization is leading to increased commuting needs of the large migrant population in the cities. Other rapidly growing regions include Guadalajara and Cancun driven by booming tourism sectors in the respective places.

Key players:
Key players operating in the Mexico Car Rental Market are National Car Rental, EUROPCAR GROUP S.A, MEX Rent a Car, Budget Rent A Car System Inc., Fox Rent A Car, Thrifty Car Rental Inc., THE HERTZ CORPORATION, Sixt SE, Avis Budget Group Inc., and Alamo. The industry is competitive with these companies focusing on fleet expansion and digital platforms to improve customer experience.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it