by The car rental services provide easy mobility and point-to-point transportation for both business and leisure travelers in Mexico. Car rentals enable customers to avail a vehicle of their choice as per their touring or business requirements without committing to ownership. This has increased the popularity of car rentals, especially among international travelers visiting Mexico.
The Mexico Car Rental Market is estimated to be valued at US$ 1405.47 Mn in 2024 and is expected to exhibit a CAGR of 7.9% over the forecast period 2024 to 2030.
Key Takeaways
Key players operating in the Mexico car rental market are Eversman Corporation, ABI Equipment, TEXOMA Augers, Agritech, Morris Industries, G P Industries, Tricon Manufacturing, Agri Drill, Avant Tecno, Caterpillar, Paladin Power, Auger Torque, Little Beaver, Danuser, Blue Diamond Attachments, Erskine Attachments, Macfarlane Augers, Terex, Bobcat, Dando Drilling International. Mexico has witnessed a steady rise in tourism over the past few years. This has created huge demand for rental cars especially in tourist destinations across Mexico. The car rental companies are expanding their fleet size and opening new branches across major cities and airports in Mexico to cater to the growing mobility demand. With strong economic growth and rising disposable income levels, international tourists visiting Mexico are expected to significantly increase in the coming years. This will boost the global expansion of the Mexico car rental market during the forecast period.
Market Drivers
Increasing tourism is a major driver of Mexico Car Rental Market Size . The tourism industry has grown substantially in Mexico over the past decade. The number of international tourist arrivals in Mexico increased from over 31 million in 2018 to over 42 million in 2021. This growing influx of tourists is fuelling the demand for rental cars for transportation needs during sightseeing, vacationing and business travel. Furthermore, low ownership cost of rental cars compared to buying a vehicle is encouraging more travelers to opt for car rentals in Mexico. The availability of a wide choice of vehicles and competitive price points offered by car rental service providers is boosting the market growth.
The current geopolitical situation is impacting the growth of the Mexico car rental market. Mexico shares borders with the United States, which has implemented stringent immigration policies in recent years that have created economic uncertainties. Tourist arrivals from the US, which is a major source market for rental cars in Mexico, have declined putting downward pressure on market demand. However, Mexico has been actively promoting tourism from other regions like Europe and Asia to offset losses from the US. Rental companies need to focus their marketing efforts on these alternative source markets and work with the tourism boards to attract more international visitors.
Rising fuel prices due to ongoing conflicts involving major oil exporting countries is also negatively impacting mobility and travel budgets. Rental companies may have to adjust their rates to factor in higher operational costs. Investing in more fuel-efficient fleets can help operators minimize expenses. Looking ahead, geopolitical stability and improved bilateral trade relations between Mexico and US would aid the market’s growth prospects post 2024. Rental firms must be prepared to capitalize on any recovery in cross-border travel and tourism.
In terms of value, the Mexico car rental market is concentrated in regions along the US border like Baja California and Sonora due to their proximity to major American cities. These northern states attract many visitors travelling between the two countries by road. The capital city Mexico City is another dominant market owing to its large population and status as an economic hub. Emerging coastal destinations in southeastern states like Quintana Roo and Yucatan are posting strong rental car demand growth buoyed by an expansion in their travel and hospitality infrastructure to promote regional tourism.
The fastest growing region in the Mexico car rental market is forecast to be Quintana Roo on the Yucatan Peninsula. Rental transactions in this southeastern state have been increasing at a double-digit pace annually driven by the booming tourism industry around hotspots like Cancun and Playa del Carmen. Massive investments are still ongoing to develop new attractions, airports and hotels. Once these projects come online, they will further stimulate rental car usage as more international air arrivals look to explore Quintana Roo’s beaches, resorts and Mayan ruins independently.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
