Industry Trend Analysis - Mediterranean Region A Bright Spot For Rental Cars - MAR 2017


BMI View: In 2017, sales to rental car companies will remain a bright spot in the passenger car markets of European countries along the Mediterranean coast (excluding Turkey). Tourist arrivals into European countries will continue to grow as tourists shun Middle East and North African countries with a deteriorating security environment, leading to higher demand for rental cars.

In 2017, we believe sales to rental car companies will remain a bright spot in the passenger car markets of European countries along the Mediterranean coast. Our Tourism team remain bullish on the prospects of further growth in the number of tourists to Mediterranean countries in Europe in 2017 as travellers shun countries in the Middle East and North Africa (MENA) region and Turkey in response to a deteriorating security environment ( see chart below). This in turn will increase demand for rental cars in these markets, leading to higher purchases by rental companies.

This has already begun playing out over 2016 as tourist arrivals rose dramatically across a number of markets including Cyprus, Spain, Italy, Portugal and Croatia. In turn, this has meant that the brightest spots in the passenger car markets of these countries have been sales to rental car companies ( see chart below). For smaller markets like Cyprus and Croatia, this boom is significant given the critical role that tourism plays in the economy and the significant role of car rental companies in the passenger car markets there ( see ' Rentals To Spur New Car Market ' , October 18 2016).

MENA's Pain Is Mediterranean Europe's Gain
Tourist Arrivals, % chg y-o-y (2017 Forecast)
Source: BMI

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