Mexico Car Rental Market
Car rental is a modern approach to hiring a car, motor, or vehicle from one party to another. These rentals are generally made on a daily, weekly or monthly basis and are mostly offered via websites and online reservations. These services are usually required by people who need a vehicle for a temporary basis, usually car owners who required to briefly relinquish their own cars for repair or insurance compensation requests or others services. Car rental services also provide complementary products such as insurance, entertainment systems and other facilities.
Market Estimates:
The Mexico car rental market is estimated to account for US$ 1,625 Mn in terms of value by the end of 2019.
Drivers:
Growing focus by the Mexican government on tourism for making top tourist destination is expected to boost the market growth over the forecast period. For instance, in February 2019, The Mexican government announced a new six-year tourism strategy that would focus on five key goals, such as building the Maya Train and enticing tourists to spend more money. Moreover, according to Mexico News Daily, Mexican President Andres Manuel Lopez Obrador stated that tourism was the nation’s third-largest foreign exchange earner, contributing $22 billion to the economy. Therefore, rising government initiatives to promote tourism in Mexico is projected to fuel market growth.
Market Opportunities:
Increasing adoption of smart tricks and technologies for enhancing the service of car rental is projected to propel the market growth of car rental over the forecast. Various companies are automating their services such as adopting car management software to minimizing the risk fraud and manage the task efficiently and adopting new strategies for business development is projected to propel the regional market growth of car rental over the forecast timeframe.
Market Restraints:
Car rental agency is highly dependent on air travel and most of the car rental agencies (approximately 70% to 80%) generate their revenues from airport locations only. If there is any sustained reduction in airline passenger traffic or the loss of an airport the concession could negatively impact the financial conditions of the car rental companies. Therefore, this factor is projected to hinder the market growth over the forecast period. Also, fluctuation in fuel cost is further estimated to hamper market growth.
Segment Analysis:
Among car type, economy car segment dominated the Mexico car rental in 2018, accounting for 25.3% share in terms of value, followed by compact car and intermediate car, respectively. For shorter time, economy rental cars are extensively rented by travelers as these car offers suitable services within less rental cost.
Among booking type, other internet access accounted for largest market share of 45.5% in Mexico car rental market in 2018. Car rental services offer variety of rental services & discounts through their websites, which in turn boosting use of this channel for car booking.
Market Trends:
The rising number of partnership among major players for improving the car rental service is projected to foster the market growth of car rental in Mexico. For instance, in October 2018, Hertz Global Holdings, Inc., announced that The Hertz Corporation has partnered with SkyTeam, one of the world's leading airline alliances. Effective October 16, 2018, Frequent Flyers of all of SkyTeam's 20 member airlines can enjoy a numerous car rental benefits during notching up miles towards air travel while they rent a vehicle from Hertz.
Competitive Section:
Players active in the market are The Hertz Corporation, Sixt SE, Avis Budget Group Inc., Alamo, National Car Rental, Europcar Group S.A., MEX Rent a Car, Budget Rent A Car System, Inc., Fox Rent A Car, and Thrifty Car Rental, Inc.
Segmentation
By City
By Car Type
By Booking Type
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