Uruguay car rental and leasing market snapshot
Despite being nestled between two of South America’s largest economies, Uruguay - the continent’s second smallest country – is home to the best GDP per capita in the region (US$17,225).
Still, Uruguay depends a lot on Brazil and Argentina, the largest automobile manufacturers in South America and its main trading partners and Mercosur counterparts.
In general, Uruguay has a free market economy characterized by an export-oriented agricultural sector, a well-educated workforce, and high levels of social spending. Nearly half of the population lives in and around the capital city of Montevideo.
Automobile Fleet Industry
When comparing to Argentina, “Uruguay is practically the same in terms of renting, leasing, telematics, and fleet management products,” regional fleet management expert Arturo Simone told Fleet LatAm.
The main difference is market size and economic conditions, says Mr. Simone who is CEO of Argentina-based vehicle fleet management company RDA Renting.
While Argentina has some 14 million vehicles, Uruguay has well under 1 million. Moreover, Uruguay’s inflation and the benchmark interest rates are nothing close to the high rates seen in Argentina. Its economy is more similar to Brazil.
One other difference for fleet managers is vehicle usability. Most vehicle use takes place in the capital city of Montevideo as practically all production occurs in the city. It is unlike its neighbors, Argentina and Brazil, where driving distances are much farther.
traffic in Montevideo (source: Shutterstock)
Another thing to keep in mind, according to Mr. Simone, is that neither operational leasing nor finance leasing is very common in Uruguay.
There are many small car rental companies in the country. They offer the standard retail business mainly for tourists and some for B2B rentals. This B2B service, however, is different than the renting or full-service leasing many other markets are used to. Basically, they don't include value-added services such as telematics, valeting services, and other customer service extras like we do, says the executive.
RDA Renting, who is part of the Element-Arval alliance, has a fleet of 320 vehicles in Uruguay and 11,000 in Argentina. Meanwhile, Argentina-based renting and fleet management company Auto Corp also started operating in the country recently. It is part of the ALD Automotive-Wheels Inc. Alliance.
“We started operations in May and our initial goal is to have a fleet of approximately 100 vehicles by the end of 2019,” AutoCorp CEO Alberto Vélez told Fleet LatAm. AutoCorp also has a fleet of 2,500 vehicles in Argentina.