Vehicle leasing and the mining industry in Chile
Although commercial vehicles (LCVs and Pickups) account for over a quarter (25-26%) of the vehicles imported to Chile, less than 10% of the country’s overall fleet is for corporate use.
The commercial fleet management market, however, has been developing steadily over the last thirty years with new practices, services, and products continuously being introduced in the country.
Although Chile’s healthy economy has undoubtedly helped fleet maturity, the most influential businesses pushing fleet management and leasing in the country and its continuing advancements has been those from the mining industry, according to Fleet LatAm advisory board members.
One idiosyncrasy of the country developed years ago is having fleet where vehicles are stationed in remote self-contained compounds with most services being carried out on site, something that has been influenced by the mining industry, according to advisory board member Jose Luis Criado.
“This ideology first started with short-term rental companies but was soon joined by companies such as vehicle importers and financial institutions and together they have developed a dynamic and mature market,” says Criado who is also the founder of Madrid-based Mobility Consultants.
Meanwhile, international vehicle leasing players such as Arval-Relsa and ALD Automotive have entered the market recently, bringing sophistication and professionalism as well as new international standards.
“While fleet management started as a captive activity in mining and fishing enterprises, car rental companies Hertz, Europcar and Relsa (which entered into a JV with international leasing company Arval) now have their own garages to serve specialized fleets in rural areas,” says advisory board president and Moby-D founder Pascal Serres.
Nowadays, full service leasing (FSL) is well-developed in the mining industry as the full cost of operating utility vehicles is tax deductible, and fleet customers have begun to recognize the advantages of FSL for benefit cars as well.
Pascal Serres speaks at WTM 2018 mobility event in São Paulo
One thing mining companies have done is raise the level of safety in vehicles and equipment, according to Franco Capurro Reposi, leasing manager for Chilean vehicle and equipment leasing company Salfa and one of the newest Fleet LatAm advisory board members.
“The mining sector is one that has seen an ever-increasing demand for security equipment, both active and passive, and this has led to higher standards for the vehicle renting and leasing industry,” Mr. Capurro says.
In fact, of the top seven countries with the largest fleets in Latin America, Chile is ranked second in terms of cars requiring the most safety features.
Among the features only required in Chile and Ecuador (ranked No. 1) are visual and sound alerts for seat belts, anchored seats, frontal collision protection, and lateral collision protection.
When it comes to Chile’s light commercial vehicle (LCV) fleet – excluding pickups – leading sales last year was the Peugeot Partner of which 4,597 units were sold. It was followed by the Kia Frontier (3,561 units), Citroën Berlingo (3,084), Foton Midii (2,568), and Chevrolet N300 (2,181).
The best-selling light vehicle brands - excluding pickups - in the country are Suzuki of which 32,963 units were sold in 2018, followed by Kia (29,087), Hyundai (28,172), Chevrolet (27,640), and Nissan (21,373).