by The car rental market provides mobility services through renting vehicles to individual customers as well as business entities for local and long-distance travel needs. Car rentals offer flexibility and affordability of transportation compared to taxi or public transport. They cater to various personal requirements including airport transportation, vacations, business trips, special events, and more. Customers can choose vehicles from a wide range including economy cars, SUVs, luxury cars, vans, etc. based on their utility and budget. Various value-added services around insurance, roadside assistance, unlimited mileage are also offered.
The global Mexico Car Rental Market is estimated to be valued at US$ 1405.47 Mn in 2023 and is expected to exhibit a CAGR of 7.9% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Rising tourism and business travel is a major factor driving growth of the Mexico Car Rental Market. Mexico received over 45 million tourists in 2021 with numbers projected to steadily increase in the coming years. This has boosted demand for rental cars especially at airports and tourist destinations across the country. Furthermore, growing economic activity is leading to rise in domestic as well as cross-border business travel from the US and other countries. Conferences, tradeshows, client meetings require reliable transportation options and car rentals are increasingly preferred over taxis or public transport for business trips within Mexico and between Mexico and US.
Tourism is a major economic pillar of Mexico representing 8.7% of GDP. The government is undertaking various initiatives to promote the country as a top tourist destination globally. This includes improving regional connectivity through airports modernization programs, introducing e-visas, organizing tourism promotion events across source markets. Such measures are creating a conducive environment supporting growth of the overall travel industry including car rentals.
SWOT Analysis
Strength:
– Mexico car rental market witnesses strong domestic demand as tourism industry grows significantly. This increases the demand for rental cars.
– Well established players with strong brand presence and technologically advanced fleet management solutions boost operational efficiency.
– Availability of wide range of vehicles catering to diverse customer needs strengthens market position.
Weakness:
– Market is highly fragmented with presence of local unauthorized players increasing competitive pressure.
– Steep taxes and unfavorable government regulations increase operating costs challenging profitability.
Opportunity:
– Growth in tourism aided by government initiatives to promote Mexico as top destination increases rental car demand.
– Strong growth of shared mobility and car sharing business models presents new revenue channels.
Threats:
– Dominance of global players threatens local SMEs due to economies of scale.
– Economic uncertainties and volatile crude oil prices affecting tourism inflow pose challenges.
Key Takeaways
The Global Mexico Car Rental Market Demand is expected to witness high growth led by strong domestic tourism industry growth. The global Mexico Car Rental Market is estimated to be valued at US$ 1405.47 Mn in 2023 and is expected to exhibit a CAGR of 7.9% over the forecast period 2024 to 2031.
The regional analysis comprises- North region accounts for around 30% share driven by strong tourism industry particularly in cities like Cancun and Mexico City.
The key players operating in the Mexico car rental market are Avis Budget Group, Europcar Mobility Group, Enterprise Holdings, Sixt SE, Localiza Rent a Car.
The strong focus of Mexican government on promoting the country as top tourism destination through initiatives enhances international tourist inflow aiding car rental demand growth. Additionally, shared mobility models are gaining popularity among customers presenting new business opportunities. However, economic uncertainties from volatility in crude oil prices and dominance of global players pose key challenges.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
