The Mexico car rental market provides convenient mobility solutions to customers for short as well as long-term duration. Rental cars offer advantages such as flexibility, affordability, and comfort for leisure or business trips. With growing domestic tourism in Mexico, the demand for car rentals is increasing substantially. Rental cars are a preferred mode of transportation used by tourists to explore various destinations within the country.

The global Mexico Car Rental Market is estimated to be valued at US$ 1220.02 Mn 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 Opportunity
Increased domestic tourism presents significant growth opportunities for the Mexico car rental market. Mexico receives a large number of domestic tourists annually. According to data by the World Travel & Tourism Council, domestic spending on tourism by Mexican residents is estimated to grow to US$ 80 billion by 2028. This rising domestic tourism is boosting the demand for convenient transit options like rental cars. Tourists prefer renting cars to independently visit multiple tourist attractions around Mexico in a flexible manner. The car rental companies are expanding their fleet sizes and service offerings to capitalize on the growing demand from domestic tourists. This presents lucrative business opportunities for established as well as emerging players in the Mexico car rental market.

Porter's Analysis
Threat of new entrants: The threat of new entrants is moderate as the market is experiencing steady growth. However, new players will require significant investment to acquire fleet of vehicles and establish presence.

Bargaining power of buyers: The bargaining power of buyers is high as there are many car rental operators in Mexico providing similar services. Buyers can easily switch between operators based on price and availability.

Bargaining power of suppliers: The bargaining power of suppliers is low given the fragmented nature of suppliers for car rental companies. There are many small suppliers providing vehicles to operators.

Threat of new substitutes: The threat of new substitutes is low as there are limited alternative means of transportation for short-term mobility needs.

Competitive rivalry: The competitive rivalry is high due to presence of many regional and international players.

SWOT Analysis
Strength: Well established brand presence of top international players. Strong customer base and experience in the industry.

Weakness: Seasonal fluctuations in demand. High operating costs. Vulnerable to economic cycles.

Opportunity: Growing business and leisure travel. Expand into tier 2 and tier 3 cities. Emergence of online rental platforms.

Threats: Stringent emission regulations increasing vehicle prices. Risk of loss or damage to rental vehicles.

Key Takeaways
The Mexico Car Rental Market Size is expected to witness steady growth driven by increasing travel and tourism. The market size was valued at US$ 1220.02 Mn in 2023 and is forecast to reach US$ 1680 Mn by 2030, expanding at a CAGR of 4.4% during the forecast period.

Regional analysis: The market is dominated by Mexico City and Cancun regions which account for over 65% of the overall market revenue. Mexico city is the largest market owing to strong presence of international airports and business travel. Cancun is amongst the fastest growing markets driven by steady rise in tourism from North America and Europe.

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., and Johnson & Johnson. These players are focusing on fleet expansion and strengthening service networks across major cities.

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