1 Sep 17

Brazil's Movida gears up for new leasing strategy

Brazilian automobile rental agency Movida wants to capitalize on a new local trend in which cars are being treated more as a service rather than an asset.
Although the company does a lot of business with corporations, it is currently working on a strategy which involves renting and leasing more to individuals.

Due to ride share apps such as multinational Uber and Brazil's 99, the culture of vehicle ownership is changing in  Brazil and this is something that Movida wants to take advantage of.

In large cities, some people are selling their cars and then using a ride share app for short commutes and renting a car for longer commutes. The percentage of those doing this, however, is small but it is bound to grow, according to Movida CEO Renato Franklin.

"We have been experiencing a large increase in demand from new clients who have never rented a car from us before," Renato Franklin said in a report by local news portal Automotive Business.

Although the country's economic crises negatively impacting car sales last year, Movida saw approximately 180,000 new car rental clients in 2016 and is now seeing about 30,000 new clients every month, he added. 
Of the companies 70,000 cars, nearly 50,000 are for its rental agencies. The remaining is used for third party fleets.
Leasing strategy
Movida is working on two new leasing strategies.

One, called Mensal Flex, involves monthly car leasing. It is for those who don't want to deal with the responsibility of maintenance or documentation and, according to Franklin, it is a strong and growing niche in the premium segment.
To serve this market, the company has recently purchased luxury car rental company Fleet Services.
Meanwhile, Movida is also preparing to offer, for the first time in Brazil, a long-term lease agreement which will be done in partnership with car dealers.
Instead of buying a new car, a consumer could just rent the one they like. Movida will pre-buy the car and then take care of the maintenance and documentation.
The project, which is still under negotiation, is a win-win situation for dealers as they will end up selling their cars no matter what, says Franklin.

Currently, Brazil has a fleet of 40 million cars. Approximately 350,000 are at dealers.

Authored by: Daniel Bland