Arturo Simone, RDA Renting: Staying competitive in Argentina fleet industry
For Argentina-based vehicle fleet management company RDA Renting, some of the ways it is planning to remain competitive in the market are implementing technology, cutting costs, and raising funds through bond offers.
CEO Arturo Simone gives Global Fleet a brief look at the company's plans over the short to mid-term.
Could you give me an idea of RDA's coverage area and this year's revenue expectations?
Established in 2013 by former automaker executives, we now have offices in Argentina and Uruguay. Among our main clients are Monsanto, Modelez, Danone, Syngenta, Sherwin Williams, Walmart, Clariant, BASF, Pirelli, Agco, Medtronic, Bridgestone, Burger King, Starbucks, Royal Canin, BAT, Avon, and Archroma.
We are expecting to reach 200mn pesos (US$11.6mn) in sales in 2017.
You launched a 15mn-peso bond offer in mid-September, being the first of a total bond offer plan of 100mn pesos. How did it go?
The demand was 40% above the offer. This is great considering it was a first offer from a company with a very diversified book which has been in the market for only four years.
What is your next step, in terms of the bond offer, and what will the funds be used for?
Besides the continuous launch of new tranches for the bond, we also intend to start working with a public trust. The acquired funds will be used to eventually help us increase our market sales, and this means purchasing more vehicles.
Speaking of vehicles, Argentina will see the first of the new Volkswagen Polos being manufactured in Brazil. Do you see this as a viable fleet car for your clients?
Sure, we have recently been purchasing Polos for many of our existing clients. However, we must keep in mind that satisfying their demand really depends on the supply available and this is something that is highly influenced by the economic condition of countries that manufacture cars.
To properly control vehicle supply in Argentina, we must continue trading with Mercosur countries such as Brazil, especially since South America sees a lot of economic ups and downs.
What is the most difficult challenge for a fleet management company doing business in Argentina and could you give me a rough idea of what RDA is doing to overcome this?
The challenge for a company of our size is finding ways to continuously reduce costs. Besides IT investments which can be quite expensive, we have to deal with interest rates which are not very good right now, two very significant factors that increase the price of our product.
If we want to remain competitive in the market, besides cutting costs, it is very important to find ways of continuously improving the efficiency of our processes.
Could you highlight some of the new innovations RDA is planning over the next year or so?
One of the main things RDA is focusing on right now is investing in technology.
Besides plans in October to implement a new CRM tool and web-based solution to help better facilitate supplier payments, we are also considering options for new telematics software.
Finally, we are also keeping a very close eye on the changes in mobility trends in other markets. We need to understand how this will impact us locally so that we can be better prepared as the changes arise.