by The Mexico Car Rental Market is estimated to be valued at US$ 1,108.1 Mn in 2022 and is expected to exhibit a CAGR of 10.1% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Car rental services provide mobility solutions for both leisure and business travelers. This includes cars ranging from economy to luxury and sports utility vehicles. Mexico receives a large number of tourists annually, mainly from the United States, which drives the demand for car rental services in the country. Additionally, car rentals are also used by businesses for short-term mobility needs of their employees.
Market Dynamics:
The growing tourism industry in Mexico is a key driver contributing to the growth of the car rental market. Mexico is one of the most visited countries globally and tourist arrivals have been steadily rising over the past few years. According to the World Travel and Tourism Council, tourism contributed US$ 211.4 billion to Mexico’s GDP in 2019, accounting for around 8.7% of national GDP. Additionally, increasing urbanization is resulting in higher business travel, which augments the demand for rented vehicles for temporary use. These factors are expected to propel the Mexico car rental market growth over the forecast period.
Higher disposable income levels coupled with increasing preference for budget traveling has also fueled the rental car market in Mexico in recent years. Car renting provides flexibility and affordability to travelers. Furthermore, several travel agencies and online travel websites offering discounted rental car packages are encouraging more tourists to opt for car rentals instead of other modes of transportation like taxis. This, in turn, is expected to stimulate market expansion through 2030.
Segment Analysis
Content: The Mexico car rental market is dominated by the economic passenger vehicles segment. This segment accounts for over 60% of the total market share owing to increasing demand for affordable mobility solutions from individual travelers and groups. Economic passenger vehicles include economy cars, compact cars, and mid-sized cars. These vehicles are cost-effective with basic features and comfort, making them ideal options for short-term local rentals.
PEST Analysis
Political: The government has taken initiatives to promote tourism through various schemes and initiatives which is positively impacting the car rental market growth.
Economic: Rising disposable income levels and growing tourism industry are fueling the demand for car rentals in Mexico.
Social: Changing lifestyle and preference of people towards independent traveling are propelling the adoption of rental cars.
Technological: Advancements in online booking platforms, integrated mobility solutions, and introduction of electric vehicles are some technological developments shaping the market.
Key Takeaways
The global Mexico Car Rental Market is expected to witness high growth, exhibiting CAGR of 10.1% over the forecast period, due to increasing tourism activities in the country. The Mexico tourism industry has been growing steadily over the past few years on account of rich culture, heritage, adventures activities, and sandy beaches which is propelling the demand for rental cars.
Regional analysis: Mexico City is the largest and fastest growing regional market for car rentals. This is attributed to the high concentration of business parks, corporate establishments, and tourism destinations. Cancun, Playa del Carmen, and Los Cabos are also promising markets owing to the growing influx of leisure travelers.
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. These players are focusing on expanding their fleet size and service offerings to consolidate their market position.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
