23 Nov 22

How to keep fleet TCO down in Latin America

One of the main goals of the corporate fleet manager is to increase productivity and this means operating fleet at the lowest reasonable cost, all while managing vehicle availability and avoiding as many legal processes as possible, according to fleet expert Julio Cesar Fassa. 

In Latin America, when it comes to keeping your total cost of ownership (TCO) down, reducing fuel costs is of utmost importance, especially in countries like Mexico, Peru, and Brazil. Keep track of cost per kilometer (CPK) and remember that this entails monitoring behavior such as harsh braking, abrupt acceleration, and running hard curves. 

CPK monitoring can be done through internet based real-time monitoring, including the collection of kilometers per liter data which compares targets to achieved results.

“In addition to negotiating prices at fuel stations, reducing your CPK calls for defining targets, providing driver training, managing averages as well as totals, and developing a driver awards plan,” Mr. Fassa told Global Fleet.

To further curb costs, pay close attention to your tires, and this means maintaining the correct tire pressure, making sure they are balanced and aligned, and assuring proper tread wear. Establish a well-organized method of keeping your tires in order. Stipulate who will be calibrating them, when it will happen, and how often it will happen.

Moreover, remember that your vehicle will be worth less than the beginning of the acquisition cycle some five years ago, but you can reduce depreciation with good care, according to the executive who is CEO of vehicle tracking company Contele in Latin America’s largest fleet market, Brazil.

For example, a depreciation of 40,000 reais (US$7,400) for a car in Brazil against 55,000 reais would result in a 15,000-real difference (3,000 reais per year over five years). The savings would be significantly high for large fleets (e.g. 3 million reais per year for 1,000 cars) 

However, the value of many car models in 2022 purchased just one-year prior actually appreciated in many Latam countries in the short-term due to the lack of new vehicle supplies impacting the market. See below for the best performing models to choose from in Brazil.

TOP 10 car models in Brazil

Car Model

2022 appreciation 

Hyundai HB20


Toyota SW4 and Ford Ranger


Chevrolet Tracker


Chevrolet Trailblazer and Hyundai HB20S


Toyota Hilux

+ 15.5%

Nissan Frontier and Honda City


Renault Kwid


Fiat Strada


Land Rover Discovery Sport


Chevrolet Montana


Another task of the fleet manager, according to Fassa, is to manage the rate of vehicle unavailability, and this means calculating the number of hours each vehicle is available by the number of hours it is under maintenance.

For example, “if a vehicle ran 22 days this month and 8 hours a day (176 hours total) and spent 18 hours at the mechanic, it would have a rate of unavailability of 18/176 or 10.23%,” explains Mr. Fassa.

To reduce this rate, the solution would be to develop a more efficient Preventative Maintenance plan or to trade the vehicle in.

Finally, you must avoid legal setbacks which also impacts costs, and this means reporting your traffic tickets immediately, knowing driver laws, and keeping your vehicles in safe condition. 

Also make sure to manage the licensing of your drivers appropriately (not expired, correct classification, no excessive points from tickets) and last but not least, treat your drivers humanely. 

For more insight on fleet management in Latin America, meet with Fleet LatAm and other participants during the next Business Networking Group meeting , taking place 13 December online. Register now, for free.


Authored by: Daniel Bland