Mexico Car Rental Market Ride-hailing Services to Drive Growth
Mexico Car Rental Market
The 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:
Car rental services in Mexico provide vehicles on rent for both domestic and
international travelers for a short period of time, varying from few hours to
few weeks. Car rentals offer added convenience, flexibility and affordability
compared to using public transportation or taxis. They are useful for traveling
within cities and between different cities in Mexico.
Market key trends:
The growth of the Mexico car rental market is primarily driven by increasing
popularity of ride-hailing services like Uber and Lyft. These ride-hailing
services are enabling travelers to rely less on owning vehicles, which is
benefiting car rental companies. As per industry reports, ride-hailing trips in
Mexico grew by over 50% in 2021 alone. Many travelers now prefer renting a car
for a few days during their trip instead of relying entirely on taxis or public
transit. This has boosted the demand for car rentals especially at airport
locations.
Porter’s Analysis
Threat of new entrants: Low capital requirements make threat of new entrants
moderate. However, established brand names and customer loyalty towards them
pose barriers.
Bargaining power of buyers: Higher bargaining power of large fleet rental
customers over car rental companies. Customers can negotiate on price and demand
discounts.
Bargaining power of suppliers: Car rental companies have moderate bargaining
power over auto manufacturers. They have to depend on major auto manufacturers
for fleet.
Threat of new substitutes: Moderate threat from alternatives like taxi,
car-sharing and ride-hailing services.
Competitive rivalry: High competition due to presence of established
international and local players.
SWOT Analysis
Strengths: Established brand names, large fleet sizes, wide network coverage.
Weaknesses: High fixed costs, seasonality of demand, dependence on auto
manufacturers for fleet.
Opportunities: Growing tourism industry, increasing mobility needs, expansion
of Tier II & III cities.
Threats: Competition from substitute services, vulnerability to economic
cycles, fluctuations in fuel prices.
Key Takeaways
The global Mexico Car Rental Market is expected to
witness high growth, exhibiting CAGR of 10.1% over the forecast period, due to
increasing tourism and infrastructure development in the country. The tourism
industry in Mexico has been witnessing significant growth in recent years,
aided by various government initiatives to promote tourism. This has
consequently fuelled the demand for car rental services.
The regional analysis of Mexico Car Rental market indicates that Central region
holds the dominant share currently. States like Mexico City, Queretaro and
Guanajuato in the central region attract the highest number of tourists and
business travelers globally. This ensures huge demand for mobility services
including car rentals in this region.
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. Major players are focusing on expanding their presence through
strategic partnerships and mergers in high growth regional markets to gain
higher shares.
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