Features
8 Jul 20

Global Fleet conference: Latam fleet management in the new normal

The last session of the 2020 Global Fleet “virtual” conference was a panel discussion addressing ways fleet managers can overcome the challenges and capitalize on the opportunities in Latin America, a region gradually catching up with North America and Europe in terms of fleet market maturity.

Taking place last Friday (3 July), Global Fleet chief editor and conference host Steven Schoefs was joined by five experts on the region, one of which was Global Fleet Expert and Chairman of the Fleet LatAm advisory board, Pascal Serres.

The others were Novartis sourcing manager Rodrigo Monroy, Geotab Associate VP (Fleet Management) Carlos Castillo, ALD Automotive Regional Director (Latin America) Kent Bjertrup, and Arval VP Global Business Development (Latin America) Ricardo de Bolle. 

Facing The Pandemic

The talk started with a brief overview of how the region is being impacted by the current health pandemic (COVID-19), mentioning challenges such as restrictions to car deliveries and registrations, slowdowns in maintenance scheduling, and overall sanitation concerns.

Compounding matters are specific regional challenges such as weak currencies, high interest rates and low GDP when compared to Europe and the United States.

In terms of solutions, one consensus expressed was the short-term need for many fleet customers to extend contracts (e.g. six months).  Flexibility in agreements is important but uncertainties from the pandemic is seen increasing the fear of change for the time being. 

As we move into 2021, an evaluation of the situation and an overall recalibration should be done, something that can eventual entail negotiating flexible alternatives with your vehicle supplier.

Harmonising Your Fleet

In terms of harmonising, explaining all benefits and maintaining good communication with your stakeholders (HR, finance department, general managers, etc.) is key, according to Mr. Monroy.

“Among the most challenging things to accomplish, however, is finding one insurance company with the same pricing and services and finding single fuel program which offers the same coverage and structure throughout the region,” Mr. Monroy said.

“Harmonization can take place but some sort of flexibility (maybe 20%) could be considered to adjust to local specifics. Larger markets such as Brazil, Mexico, Argentina, and Colombia, will drive your policy decisions,” said Mr. Bjertrup.

Make sure that an adequate number of service shops are available in each country for the particular brand or brands you select, he added.
 

Most common fleet car brands in Latin America  

Willis Towers Watson: Common fleet car brands in Latin America

Source: © 2020 Willis Towers Watson

 

The “New Normal” does bring benefits if you are proactive. Many fleet managers are learning to be more agile and more technologically savvy, an evolution which can be supported by vehicle suppliers.

Leasing companies can share expertise on data management, green initiatives, and tax incentives. And if they are international, they can take what they have learnt from Europe and the United States and support with the evolution in Latin America.  It's more of when it will happen in the region then if it will happen. 

Safety And Sustainability

Although there are some needs for safety and sustainability improvements in Latin America, the region has recently been seeing a lot of changes for the better.

“Laws regarding vehicle safety standards (e.g. airbags, ABS, ESP, traction control) are changing a lot as well as regulations on sustainability,” said Mr. de Bolle, citing the large extent of ethanol vehicles in Brazil and the growing number of electric vehicles (EV) and hybrids in Mexico.

“Improving safety and sustainability in your fleet can be accomplished through the adoption of technology. It is a useful tool for asset recovery, supervising driver behaviour, and even for the sanitation management needs of today,” said Mr. Castillo.

You should first pilot the technology. See how it works and then compare it to the different solution providers out there. Thereafter, measure the benefits and make an educated decision.

MOBILITY TRENDS

Finally, a few mobility trends were highlighted during the talks, among them being ride-hailing, bike-sharing, e-scooters, and last mile mobility solutions such as motorcycle and bike delivery services.

“Due to the lack of good public transportation some areas and other factors, ride-hailing is very successful in Latin America,” said Mr. Serres, pointing out players such as Uber, 99, and Cabify.

Grow Mobility, a leading micro-mobility company in the region, is also creating waves in Latin America with its bike-sharing and e-scooter services, he added.

 

For more information on harmonization, read Expert Insights No. 4 publish by the Fleet LatAm Institute. It is entitled "How to align car brands policies across Latin America" and can be dowloaded here.

Furthermore, make sure to attend the Fleet LatAm “virtual” conference scheduled for 29-30 September. The conference will be free of charge. Stay tuned for more information.

Authored by: Daniel Bland