Fleet LatAm Business Networking Group addresses vehicle, parts delays

Dealing with delays and constraints for new car and spare part deliveries is of concern for many fleet managers in Latin America today, but this can be resolved with good planning and a little bit of patience and collaboration.

This is according to experts of the Fleet LatAm Business Networking Group (BNG) who spoke on Tuesday (18 May).

Following a welcome and introduction by Fleet LatAm Chairman Pascal Serres and a Fleet LatAm update by Nexus Communication Chief Editor Steven Schoefs, speakers of the day represented all aspects of the vehicle supply market, including an automaker, two vehicle leasing and fleet management providers, a video telematics supplier, and a fleet manager. 

The discussions were mainly revolved around delays in the deliveries of new vehicles, automobile parts and components, and the worldwide semiconductor shortage. Although automobile sales fell drastically in the second quarter of last year when the COVID-19 pandemic started, the market returned a bit faster than expected throughout the second semester and this resulted in a lack of new vehicle supply owing to automobile plant shutdowns earlier in the year. 

For 2021, sales in the first few months have been a bit slow amidst the Coronavirus complications, but both production and sales are seen improving as we get closer to the end of the year. 

“As to when we get back to normality is difficult to forecast but I would say that a stability in vehicle production could be seen around September, and delivery times should return back to normal by the end of the year,” said Tiago Castro (pictured left) who is Senior Director for Marketing and Sales for the Nissan Motor Corporation in Brazil.

According to Mr. Castro, low automobile stock throughout the region is also being influenced by increased transportation costs and commodity prices, both of which impact the price and the availability of vehicle parts and components. 

Moreover, as modern cars today are filled with microchips, the global semiconductor shortage is hindering the completion of car manufacturing without a doubt.

To resolve the matter, automakers are working on strategies to assure components and parts availability and adjusting prices accordingly. Another factor impacting prices in the region which cannot be overlooked is FOREX. Many currencies in Latin America loss value against the US dollar in the first semester of last year but exchange rates have been fairly stable since 4Q20.

Other vehicle suppliers present during the meeting were LeasePlan and Ariza, both of which expressed the importance of communication and flexibility. 

Communication is key, especially in face of the complex situation we are dealing with today, according to LeasePlan Mexico CEO Regina Granados. (pictured right) “Suppliers need to keep their clients in the loop. For instance, a supplier may not have the price of a specific car model now, but then have it in three months when it actually arrives. If not communicated properly, this could lead to misunderstandings,” Ms. Granados said,

Owing to the late delivery of cars, leasing companies also need to be open minded in terms of contract terms (agreement length, kilometer stipulations, and delivery times, etc.), Ms. Granados added. 

Moreover, according to LeasePlan Head of Procurement Mario Castañeda (pictured left), the company has recently launched a department to specifically deal with the current scenario. 

“This department is specifically focused on contacting automakers and car agencies to find out the availability of vehicles and then effectively communicating this to our clients,” said Mr. Castañeda.

Fleet management company Ariza CEO Antonio Pinto (pictured right) further expressed the importance of flexibility during the meeting.

“As for Ariza, we offer unbundled open-end tailored solutions for passenger cars and trucks (including electric & hybrid) which are flexible and transparent,” said Mr. Pinto, explaining that the Mexico-based firm offers fixed or floating rates which can be calculated in Mexican Pesos or US dollars.

Fleet Manager Perspective

Meanwhile, BNG attendees also heard comments from Eduardo Bortotti (pictured top) who is Head of Facilities and Corporate Mobility for Brazil-based energy company Enel. Mr. Bortotti, who manages 3,483 vehicles in the country, gave attendees an idea of what his team is doing to help Enel and its drivers efficiently get through the uncertainties brought on by the Coronavirus pandemic and the ongoing shortages in supplies.

First of all, his team identified the most crucial parts impacting the company’s fleet maintenance schedule and found that 95 parts represent some 30% of all maintenance. And with this, he has been negotiating with automobile parts distributors to ensure that his demands are met. 

“Moreover, besides stocking up on quick repair kits that we have created for our vehicles, we are using parts from manufacturers that are very similar in quality to the original whenever necessary. Finally, we have set up repair shops to perform maintenance directly at our sites,” Mr. Bortotti said.

A Bit on Technology

Fernando Ferreira (pictured left) from video telematics firm Lytx was present at the meeting to shed some light on how technology can improve fleet operations in Latin America. Mr. Ferreira, who is channel sales director in Latin America for the US-based firm, explained that the company deploys cameras, built-in accelerometers, and artificial intelligence (AI) monitors in vehicles.

This cloud-based technology provides audible alerts aimed at helping drivers correct risky behaviors in real time all while alerting fleet managers of the situation. A streamed video allows fleet managers to monitor vehicles, drivers, and cargo, across their entire fleet. 

Among other things, it helps with the detection of distracted driver behaviour such as eating, drinking, smoking or using the cell phone while at the wheel or not using a seatbelt.

Wrap Up

With all things considered for the day, we cannot go without highlighting the importance of collaborating with others and understanding that we all have a key part to play in getting through this difficult time. “People in the market have supply concerns and I feel that some may be stock piling. All players need to be transparent so that we can reduce these concerns and build trust among each other,” said Mr. Serres.

Upcoming Dates to Remember:
Global Fleet Managers Club meeting (for Regional Buyers):  6 July
Fleet LatAm Business Networking Group meeting: 13 July (topic TBA)
Fleet LatAm Conference: 20 September (topic TBA)