Mexico Car Rental Market was valued at US$ 1,108.1 Million in 2022 and is projected to reach US$ 2,388.8 Million by 2030, exhibiting a CAGR of 10.1% over the forecast period (2023-2030). According to Mexico Car Rental Market Report, "By Car Type (SUV, Hatchback, Sedan) By Booking Type (Offline Booths, Mobile Application, Aggregator & Booking Websites, and others), By Airport Facility (International, Domestic).
Improved Hospitality Infrastructure in Mexico is one of the major reasons, because of which the Mexican Car Rental sector is growing. Tourism in Mexico looks promising. Extensive government initiative for new projects to improve road transport, ports, telecoms as well as water and energy facilities are expected to sustain growth of the travel and tourism industry in the country. According to Mexico News Daily, The proposed 8.3 trillion peso (US $417 billion) budget for 2023 by the federal government includes big-ticket items like infrastructure projects, pensions for senior citizens, health care, and social programs. The Tourism Ministry of Mexico is expected to get 145.6 billion pesos (US $8.42 billion) in 2023, an increase of 111% compared to the resources it was allocated for 2022, with focus on constructing new hotels and beautify public places. Improved hospitality infrastructure is anticipated to attract more international tourists to Mexico.
Mexico Car Rental Market- Drivers
Rising amount of investments in the country
It is anticipated that the expansion of the car rental market will be aided by the rising number of investments in the nation. For instance, CRE Venture Capital led a US$ 1.2 million seed round for South African startup FlexClub, which matches investors and drivers for ride-hailing services. CRE Venture Capital puts resources into initial phase tech organizations. The company has its main office in New York City and a regional office in Lagos, Nigeria. Through a partnership with Uber Mexico, the company is utilizing financing to recruit new team members and expand across the continent. As a result, it is anticipated that rising investment will drive market expansion.
Mexico Car Rental Market – Restraints
High Dependency on Air Travel
According to CMI Analysts, the majority of car rental companies (approximately 70% to 80%) only generate revenue from airport locations, making them highly dependent on air travel. There could be a negative impact on the financial situations of car rental companies in the event that there is a sustained decrease in the number of passengers traveling by air. As a result, it is anticipated that this factor will restrain market expansion during the forecast period. This is mainly because of the dependency of Car Rental companies on Air Travelers for their monthly revenue inflows.
Mexico Car Rental Market - Key Developments
On March 1, 2023 Hertz and BRADY entered a partnership agreement. Hertz Team JOTA, the new Hypercar motor racing team sponsored by Hertz and Singer Group, announced BRADY™ as its official apparel partner and unveiled the Porsche 963 LMDh race car's new Hertz Racing Gold livery. BRADY™ is an apparel brand that has technical apparel for every activity including men's boxer briefs, sweatpants, t-shirts and other BRADY™ by Tom Brady apparel styles. BRADY'S partnership with Hertz Team JOTA is his first business venture into auto racing since his legendary NFL quarterbacking career came to an end. Before finally calling it quits at the conclusion of the 2022 season, Brady was the quarterback for both the New England Patriots and the Tampa Bay Buccaneers, winning seven Super Bowls. He also enjoyed exceptional dominance and longevity. JOTA will be sponsored by a group of partners, including Hertz and Singer Group, as they move up to the WEC's top division. The Brady clothing brand will be one of those partners. JOTA has finished on the podium at Le Mans in nine of the last ten years, winning three races in their class, and they dominated LMP2 last year and won their first championship.
On October 10 2022, as a feature of its internationalization procedure, the versatility supplier SIXT opened its most memorable station in Erbil, the monetary capital of Iraq last week. Muhanad Rental Cars, a Muhanad Group company, has begun a franchise partnership with the new station. The recently settled station is the most important phase in an extension plan that incorporates SIXT stations at worldwide air terminals and in other significant urban communities in Iraq. SIXT is already one of the biggest providers of mobility in the world, with more than 240,000 vehicles in over 100 countries. The company is always expanding internationally. A couple of months prior, the organization settled in Pullach close to Munich extended its corporate impression to Canada, and toward the finish of last year to Australia with another establishment accomplice. Over the past ten years (financial year 2021 compared to 2009), SIXT's international business has grown from 29% to around 70%. This is not only the result of expanding geographically, but also of significantly increasing market share in international markets.
Mexico Car Rental Market- Impact of Coronavirus (Covid-19) Pandemic
Since the beginning of the pandemic, numerous industries around the world have suffered. The rapid spread of COVID-19 has had a major impact on the entire tourism sector in 2020, which has also impacted the car rental market. According to the United Nations World Tourism Organization (UNWTO), the global pandemic, the first of its kind in a new era of interconnectedness, has put 100 million jobs in danger. Many of these jobs are in micro, small, and medium-sized businesses that employ a large number of women, who make up 54% of the tourism workforce. Due to the Mexican Car Rental Business being dependent on the Tourism sector, the sector has had a reduction in it service delivery thereby finding it difficult to cover its fixed costs during the pandemic. Countries dependent on tourism will likely experience the crisis's negative effects for much longer than other economies. According to oecd.org, Mexico is a major player worldwide in the tourism industry, which is an important part of the country's economy. The sector directly contributes 8.5% of GDP, 5.8% of formal sector full-time paid employment, and 77.2% of service exports. The pandemic has disproportionately impacted contact-intensive services that are essential to the tourism and travel industries. Until people feel safe enough to travel in large numbers again, these services will continue to struggle.
To know the latest trends and insights prevalent in this market, click the link below:
https://www.coherentmarketinsights.com/market-insight/mexico-car-rental-market-3177
Browse 150 market data tables* and 90 figures* on “Mexico Car Rental Market: forecast to 2030”
Key Trends and Analysis of the Mexico Car Rental Market:
The Mexico’s Car Rental Market, which was estimated to be worth US$ 1,108.1 Million in 2022, is expected to grow at a CAGR of 9.1% between 2022 and 2030, reaching US$ 2,388.8 Million in 2030.
The growth of the Mexico car rental market is being driven by improvements in standard of living and an increasing number of leisure travelers. As a result, market expansion will also be aided by expanding travel and tourism.
Some of the major players in the Commercial Mexico Car Rental Market include 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 among others.
