by 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:
Car rental services provide rental of vehicles including passenger cars, light commercial vehicles and other utility vehicles on short and long term basis. The rising automotive tourism in Mexico along with increasing demand for mobility services has driven growth of car rental market.
Market key trends:
One of the key trends boosting growth of Mexico car rental market is increasing automotive tourism. Mexico has emerged as one of the sought after destinations for automotive tourism in recent years owing to presence of scenic routes and terrains suitable for off-roading activities. According to World Tourism Organization, automobile tourism in Mexico witnessed double digit YoY growth between 2016 to 2020. To capitalize on this growing demand, car rental players are expanding fleets of SUVs and premium vehicles suitable for road trips and enhancing digital channels for easy bookings. This is positively impacting revenue stream of market players and driving overall market growth.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate as the market requires high initial investment for fleet of cars. However, ease of getting license encourages new small players.
Bargaining power of buyers: The bargaining power of buyers is high as car rental services are available from various competitors and buyers can easily switch between brands.
Bargaining power of suppliers: The bargaining power of suppliers is moderate as major car rental companies buy cars directly from automakers in bulk volumes.
Threat of new substitutes: The threat of new substitutes is low as transportation by car rentals has limited substitutes like taxi services, rental of self-driven cars.
Competitive rivalry: The rivalry is high among existing car rental players to capture more market share.
SWOT Analysis
Strength: Wide service network across major cities, large fleet of cars, brand recognition are the key strengths.
Weakness: High dependence on seasonal demand, vulnerability to economic fluctuations, rising maintenance and fuel costs affects profitability.
Opportunity: Growth in tourism and business travel, rising disposable income are the major opportunities.
Threats: Stringent emission norms increasing replacement costs, threat from car sharing startups, rising fuel prices are key threats.
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 tourism and business travel. The country received over 41 million tourists in 2021 showcasing an increase of 26.3% over 2020. This exponential growth in inbound tourism is generating high demand for car rental services.
Regional analysis – Mexico City, Cancun and Guadalajara are the major rental car markets in Mexico. Mexico City accounts for over 30% market share owing to large business travel and tourism influx. Cancun enjoys dominance in coastal tourism rentals market.
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. National Car Rental dominates with over 20% market share. Players are focusing on expanding fleet size and service network across major tourism hubs.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc.
