Features
3 May 22

Fleet LatAm discusses challenges, opportunities at Global Fleet Conference

Corporate fleet and mobility management in Latin America poses several challenges but they can be overcome with the right tools and preparation, according to speakers at the latest Fleet LatAm Business Networking Group (BNG) meeting held on Tuesday (2 May) just ahead of the Global Fleet Conference 2022 in Portugal.

Besides supply chain setbacks restricting vehicle inventories which have resulted in payment and renewal delays, other hurdles are the impacts of the war in Ukraine, and certainly the rise of maintenance cost and fuel prices.

In 2021, the price of fuel in Brazil rose some 41% year-over-year, Mexico (+24%), and Colombia (+11%) and the trend has continued in 2022.

One challenge which seems to be a bit more crucial in Latin America is vehicle theft, especially considering the low percentage of vehicles which are insured in the region. 

“In Brazil, Mexico, and Colombia, no more than 30% of the vehicles are insured,” said Alfredo Krueger (pictured left) who is VP Latam region for vehicle tracking and insurance telematics company LoJac.

With an annual average of some 142,451 vehicles stolen, Brazil represents 37% of the Latam total. Meanwhile, the 114,841 vehicles in Mexico represent 29% and the 25,446 vehicles in Colombia represent 6% of the region, explained Krueger who is also Managing Director for Mexico.

Besides vehicle location and recovery services, fleet managers should take advantage of telematics and other tools for fuel control, crash analysis, and driver behavior optimization.

One important thing to know when doing business in Latin America is knowing how to harmonize fleet management and mobility dynamics across the region, according to pharmaceutical company Zoetis Head of Global Fleet Paula Oliveira (pictured right) who gave attendees an idea of the region.

“In terms of telematics, Zoetis has implemented it in Brazil, Colombia, and Ecuador, and it is on the way in Mexico. Fuel control is pretty much in place except for challenges in Chile, Peru, Ecuador, and Central America, said Ms. Oliveira. Most countries are serviced by local and regional fleet management companies with the exception of Peru being more regional and Ecuador more local. Central America, overall, has less options.

Also keep in mind that Argentina is mainly direct purchase owing to the high inflation and interest rates and, according to the executive, Brazil and Mexico are benchmarking countries in many aspects of policy implementation.  

Electric Vehicles    

Considering the growing trend of corporate sustainability, one thing to keep an eye on in terms of the vehicle leasing market today is the move towards xEV (all types of electrified vehicle). Total cost of ownership (TCO), however, must be determined first and this is certainly true for Latin America.

From 2019-2022, TCO in Brazil has increased approximately 77%, Chile (+44%), Mexico (+40%), and Colombia (+38%), according to Ricardo de Bolle (pictured right) who is Global Business Development Director for the Latam region at Arval.

“While Mexico has more xEV options, we launched an ethanol program in Brazil as an alternative to gasoline,” said Ms. Oliveira.

As for the other countries, Zoetis has hybrids available in Colombia, Chile and Ecuador, while it does not in Peru. In Argentina, xEV is still a challenge to implement and in Central America, these types of vehicles are getting government incentive in Costa Rica.

In terms of TCO, “what is needed to bring it down and to support the xEV transition is state of the art battery and charging technology (both home and public) and more government policies aimed at offering tax and financial incentives,” said Octavian Chelu (pictured right) who is Principal Consultant for Fleet & Leasing at Frost & Sullivan.

Despite the lack of product awareness in Latin America, there are opportunities as leasing is an emerging business segment in which competition is quite concentrated, added Mr. Chelu.

Among the main players are multinationals Arval, Element, ALD Automotive, LeasePlan, and Volkswagen Financial Services, and locals such as Localiza, Unidas, RDA, Ariza, and Mareauto-Avis.

“By country, showing the most growth in the full-service leasing market in 2021 was Chile which rose 6.7% year-over-year, followed by Colombia (+5.1%) and Mexico (+5%),” said Mr. de Bolle, adding that the largest growth expectation for 2022 is in Mexico (+12%), followed by Brazil (+8.2%).

Besides xEV leasing, among the opportunities where growth is seen in the coming months and years are used car leasing and the offering of new mobility solutions, said Mr. Chelu. 

The Fleet LatAm BNG meeting received approximately 80 attendees, being some 45 face-to-face and 35 online. It was moderated by Fleet LatAm President Pascal Serres (pictured left-left) and assisted by Fleet LatAm Editor Daniel Bland (pictured left-right). Stay tuned for the next BNG meeting taking place 5 July online. See you then! 

 

If you are interested in associating with the BNG, contact Pascal Serres: pserres@nexuscommunication.be


Top Photo: snapshot of the BNG meeting. All photos (copyright: Fleet Latam)  

 

Authored by: Daniel Bland