Fleet management in Latin America - Arval
Fleet management in Latin America and the Caribbean differs from some of the more mature markets in the world such as Europe and the United States. Thus, knowing these differences and preparing your team to adapt properly is key to an adequate transition into the 33-country region.
To get a better idea of the changes to prepare for, here are a few tips from regional expert Ricardo De Bolle of international fleet management and leasing company Arval. He is Director of Global Business develop for the Latam region.
First of all, we must understand the cultural difference in Latin America.
Compared to its North American neighbor the United States, “several Latam countries have suffered from high inflation in the recent past so people have tended to buy vehicles because they were something of a safe haven for their money,” De Bolle said in a recent interview published by Arval.
Argentina inflation rate reached 31.2% in July, 2018 (Source: INDEC)
These are countries where people like to own assets as a result, so introducing them to leasing requires them to completely change their mindset. That’s why conversations about fleet almost always start with the subject of finance.
When comparing to Europe, there is a fundamental difference in that many of the suppliers of what Latin Americans would consider to be fleet services are provided by what Europeans would think of as daily rental companies. As such, there is also a cultural difference in how fleet services are delivered.
However, an important similarity to Europe is that businesses that use fleet management tend to pay for their services bundled into a single monthly payment, something that is less common in North America.
During the interview, the executive also highlighted some of the difference among the Latin American countries themselves.
There is very much a localized fleet culture and there are even very big differences between certain Latin American countries with Brazil being much more applied in its approach than, say, Peru, Chile and Argentina, he said.
Mexico also has a big influence on how business is done in this part of the world. Basically, “Brazil and Mexico represent best practice benchmarks in Latin America,” says De Bolle.
Finally, the executive pointed out that there are significant differences in local legislation, tax and infrastructure when it comes to company vehicles.
For instance, there are some very strong incentives for the use of pick-ups or SUVs as opposed to cars in some regions as there is no personal usage tax on these vehicles, he said.
Arval is part of the Element-Arval fleet management alliance, the largest collaboration of its kind in Latin America. Managing over 85,000 vehicles, it is composed of multinational leasing firm Element and Arval, and supported by local expertise from Ecuador-based Mareauto and Argentina group RDA Renting.
Arval Global Business Development Director for Latam region, Ricardo de Bolle (Source: Arval)