The global 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:
The Mexico car rental market involves renting passenger cars and light commercial vehicles for short periods. Car rentals are essential for travelers who do not own personal vehicles. They offer flexibility and convenience to explore various destinations within Mexico. Furthermore, car rentals allow customers to upgrade or change vehicles as per their requirements. This has augmented the demand for car rentals, especially among tourists.
Market key trends:
One of the key trends driving growth of the Mexico car rental market is rapid growth in the tourism industry. Mexico is one of the most visited countries globally and tourism has evolved as an important economic driver. According to World Travel & Tourism Council (WTTC), tourism accounted for over 8% of Mexico’s GDP in 2021. The number of foreign tourist arrivals in Mexico was over 21 million in 2021. This is significantly high considering impacts of the COVID-19 pandemic. Furthermore, Mexico is leveraging strategies like launching tourism campaigns to boost international arrivals. Rising tourism and subsequent travel has boosted the demand for renting cars among tourists to explore destinations within Mexico. This will continue fostering growth of the market over the forecast period.
Porter’s Analysis
Threat of new entrants: Low barriers to entry due to low capital requirements. However, established brands have brand recognition and loyal customer base.
Bargaining power of buyers: Moderate bargaining power due to presence of many players. Buyers can easily compare prices online.
Bargaining power of suppliers: Suppliers have low bargaining power due to fragmented nature of industry with many rental car companies.
Threat of new substitutes: Moderate threat from sharing economy platforms like Uber. However, car rental fulfills requirement of customers needing cars for long distance or duration trips.
Competitive rivalry: High competitive rivalry due to presence of many regional and international players. Players compete on pricing, fleet size, locations and customer service.
Key Takeaways
The Mexico Car Rental Market is expected to witness high growth, exhibiting CAGR of 10.1% over the forecast period 2023-2030, due to increasing tourism and business travel in the country. The market size was valued at US$ 1,108.1 Mn in 2022.
Regional analysis: The northern region dominated the Mexico car rental market in 2022 due to presence of tourist destinations like Cancun and Playa del Carmen receiving large number of domestic and international tourists. The central region is expected to be the fastest growing region during the forecast period owing to expansion of key players in provincial cities.
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. Players are expanding their network by adding locations and fleet to cater to the growing number of travelers.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
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