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 allow customers to rent a car for short periods, ranging from few hours to few months. Vehicles available for rent include economy cars, executive cars, luxury cars, SUVs, and premium luxury cars. Key end users of car rental services in Mexico include leisure travelers, business travelers, and event organizers.
Market Dynamics:
The Mexico car rental market is driven by the rising domestic tourism in the country. According to the Secretary of Tourism of Mexico, there were over 35 million domestic tourists traveling within Mexico in 2019. The growing middle class population and rising disposable incomes have boosted domestic tourism in recent years. Additionally, a steadily growing corporate sector is also fueling the demand for rental cars for business purposes in Mexico. Furthermore, event organizers widely use rental cars for transportation purposes during various events, conferences, product launches, and other corporate gatherings. The availability of a wide range of vehicles from economy to luxury cars through prominent rental service providers such as National Car Rental, EUROPCAR GROUP S.A, and MEX Rent a Car among others at affordable prices is propelling the Mexico car rental market growth.
SWOT Analysis
Strength: Mexico is one of the top tourist destinations globally and has well-developed transportation infrastructure which facilitates high car rental demand. The presence of international players has led to availability of a wide range of car types and competitive pricing. Local players provide cost-effective options and add to variety.
Weakness: Tourism activities reduced significantly during the pandemic which slowed down the car rental market growth. Some local players have limited fleet sizes and services compared to international brands.
Opportunity: As tourism bounce back strongly, demand is projected to rise rapidly. Expanding Mexico's highways and international airports provide new areas for market penetration. Partnerships between local and international operators can help address weaknesses.
Threats: Alternative modes of transport like taxis and ride-hailing services capture some share. Restrictions during COVID-19 outbreaks continue to pose challenges. Economic uncertainties or safety issues can dampen tourism.
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 international tourist arrivals in Mexico. Arrivals have recovered strongly post pandemic restrictions and are projected to further rise with government support to promote the country as a top destination.
Regional analysis: The Mexico City region dominates the car rental market with the highest volume of rentals driven by large number of visitors to the capital city. Cancun in Quintana Roo region generates significant demand during peak tourist season and is growing at a fast pace.
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 companies have a strong presence across major cities and airports in Mexico. The market is competitive with presence of both international and domestic operators.
