February 21, 2024
Mexico Car Rental Market

The Mexico Car Rental Market Is Projected To Driven By Growing Tourism Industry

The car rental market in Mexico has been witnessing steady growth over the past few years owing to the expansion of the tourism industry across the country. Car rentals provide tourists with a convenient and affordable transportation option to explore various tourist destinations within Mexico. Rental cars offer flexibility, comfort, and independence to travelers during their vacations. From international business travelers to family vacations, renting a car for a few days is a popular choice among both domestic and international visitors. The growth in air passenger traffic and overall travel and tourism revenues have positively impacted the demand for rental vehicles in Mexico. Luxury and mid-size vehicles are the most preferred categories among customers depending on their travel requirements and budgets.

The global Mexico Car Rental Market is estimated to be valued at US$ 1220.02 Mn in 2023 and is expected to exhibit a CAGR of 4.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

One of the key trends gaining traction in the Mexico car rental market is the growing preference toward online bookings and reservations. Many international and domestic car rental brands operating in the country have developed robust online platforms and mobile apps to facilitate seamless rental services. Customers can easily compare rental rates, browse vehicle options, add extra services or insurance coverage, and complete bookings online in just a few clicks from the convenience of their homes or mobile devices. This trend is being driven by increasing internet and smartphone penetration in the country. Many operators are offering lucrative discounts and promotions on online bookings to encourage customers to opt for virtual transactions over traditional counter reservations. This is expected to boost the overall revenue and profitability of key players through enhanced operational efficiencies over the forecast period.

Porter’s Analysis

Threat of new entrants: The threat of new entrants is moderate as the car rental market in Mexico is fragmented with presence of several established players. New entrants will require high capital investments and availability of a fleet of vehicles.

Bargaining power of buyers: The bargaining power of buyers is high given the presence of various options available for renting cars. Buyers can negotiate on pricing and choose from various vehicle types and brands.

Bargaining power of suppliers: The bargaining power of suppliers is moderate as car rental companies source vehicles directly from OEMs or through dealers. Suppliers have limited influence due to availability of multiple supply sources.

Threat of new substitutes: The threat of new substitutes is low as there are limited alternatives for renting cars for local and inter-city transportation needs.

Competitive rivalry: The competitive rivalry is high given presence several regional and international players operating in the country.

Key Takeaways

The Global Mexico Car Rental Market Demand is expected to witness high growth over the forecast period of 2023 to 2030. The market size for 2023 is estimated to be US$ 1220.02 Mn.

Regional analysis: The Mexico car rental market is dominated by Mexico City region which accounts for around 30% of the total market share. Other major regions include Guadalajara and Monterrey. Increasing tourism and business travel is expected to drive significant demand in these regions over the coming years.

Key players: Key players operating in the Mexico Car Rental Market are Cipla Ltd, Merck & Co., Inc., F. Hoffmann-La Roche Ltd., GlaxoSmithKline plc, Bayer AG, Amgen Inc., Novartis AG, Sanofi S.A., Pfizer Inc., Johnson & Johnson. Players are focusing on expanding fleets and service offerings to leverage opportunities in the high growth market.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it