The Mexico car rental market includes companies that offers car rental services for short as well as long term periods to customers. Rental cars are categorized into economy, compact, intermediate, standard, premium, luxury, and other vehicles. These vehicles are rented by customers for local and outstation transportation needs. The increasing travel and tourism industry in Mexico has boosted the demand for car rental services over the years. Rapid urbanization and high demand for personal vehicles have positively impacted the market growth. Moreover, changing lifestyle preferences and growing disposable income have increased the adoption of car rental services for daily and official commute.
The global Mexico Car Rental Market is estimated to be valued at US$ 1220.02 million 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 Dynamics:
The high demand for inter- and intra-city transportation referred from the heading further augments the Mexico car rental market growth. As Mexico witnesses a surge in business and leisure travel, rental cars become a convenient option for local commuting as well as outstation travel. Moreover, factors such as lack of public transportation in rural areas and traffic congestions in major cities encourage the adoption of rental vehicles for daily commute. Furthermore, rising air passenger traffic in the country positively impacts the car rental bookings. For instance, according to Airports Council International (ACI), passenger traffic at Mexican airports grew by 6.6% year-on-year in 2017. This results in increased demand for rental cars at airport locations.
Segment Analysis
The Mexico car rental market is dominated by the compact and economy car segments which together account for around 60% of the total market. Compact cars, especially those from Mexican brands like Nissan and Volkswagen have emerged as popular options due to their affordability and fuel efficiency. The demand for these segments has been further boosted due to the growing middle class in Mexico which prefers more affordable mobility solutions. Luxury cars continue to remain a niche segment confined mainly to business travelers and high income individuals.
PEST Analysis
Political: The Mexican government has supported the development of local car manufacturers like Nissan through favorable import policies and investment incentives. This has strengthened the domestic automotive industry.
Economic: Mexico has seen steady GDP growth in recent years boosting disposable incomes. However, inflation remains a concern which could impact car rental prices.
Social: Urbanization and increasingWomen workforce participation have bolstered the demand for affordable rented transport options for both personal and commercial use.
Technological: Companies are investing in fleet management technologies like GPS tracking and digital payment solutions to optimize operations and provide enhanced customer experience.
Key Takeaways
The Mexico Car Rental Market Growth is expected to witness high growth over the forecast period supported by steady economic expansion and urbanization in the country. The global Mexico Car Rental Market is estimated to be valued at US$ 1220.02 million in 2023 and is expected to exhibit a CAGR of 4.4% over the forecast period 2023 to 2030.
Regional analysis – The central region of Mexico accounting for cities like Mexico City and Guadalajara dominates the car rental market due to its large population and business traveler base. It accounts for over 35% of the country’s total rental car fleet.
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. Cipla Ltd is the dominant player with over 20% market share owing to its wide network and affordable offerings.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
