Kent Bjertrup, ALD Automotive: Revenue up 30% in LatAm
Last year, revenue and fleet size for French multinational vehicle leasing company ALD Automotive increased at a significantly higher rate in Latin America than its global average, according to LatAm regional director Kent Bjertrup.
Join Global fleet as we discuss this and other issues with the executive, among them being the ever growing question of whether or not it is worth it to have electric vehicles or hybrids in your Latin American fleet.
Worldwide, ALD saw a 9.8% year-over-year increase in fleet size last year. How much did the company’s fleet size grow in Latin America and which countries saw the most growth?
ALD’s fleet size in Latin America grew 14.4% in 2017.
The largest growth, in terms of absolute numbers, was in Brazil and Mexico and this is due to the sheer size of their markets. While Brazil saw 7% growth, Mexico was about the same.
Percentage-wise, the fleet size in Chile, Peru, and Colombia increased more. Although they have a much smaller base, their performances still contributed to the overall numbers in Latin America.
ALD saw a 10.9% rise in net income last year. Was it better or worse in Latin America?
Revenue in Latin America was significantly higher, increasing 30% compared to 2016. We have been investing a lot in the newer markets though, being Chile, Peru, and the recently added Colombia office.
The use of electric vehicles (EV) and hybrids is on the rise in Europe, but it is taking a while to take off in Latin America. Is it worth it to have these types of vehicles in your Latam fleet right now?
We have already tested the use of EV in Brazil and are carrying out a new test in Colombia right now.
From our experience, having an EV or hybrid fleet in Brazil, Chile, Peru, or Colombia still does not pay off and much of it has to do with the lack of infrastructure. During our Brazil test, we found that motorists had to drive quite far for recharging.
However, in Mexico, the use of non-plugin hybrids [e.g. Toyota Prius] is slowly becoming more attractive. We actually have clients with large fleets that are switching over and this is the way forward in the country, at least for now.
2018 Toyota Prius (SOURCE: Toyota)
Besides saving on gasoline costs, there are other benefits such as no driving restrictions in Mexico City (something that is imposed on combustion engine cars) as well as tax breaks. If you take everything into account, TCO is nearly the same as gasoline cars for some companies.
As for plugin hybrids and full-electric vehicles, we will have to wait a bit.
On the flipside, the use of diesel engines is dropping quite a bit in Europe. Do you see this in Latin America?
In the countries we operate in (mainly Brazil, Mexico, Chile, Peru, and Colombia), diesel represents practically none of our fleet so it does not affect us. If we have any diesel at all, it is less than 2% of our fleet and they are primarily commercial vehicles or trucks.
In the past, lots of government investment was made in Europe and the private sector followed suit. However, governments are now creating legislation which actually bans diesel so the tables have turned quite a bit there. This drastic change has not occurred in Latin America.