2 Dec 20

Latam vehicle leasing seen up in 2021, regional executives say

The corporate vehicle leasing and fleet management industry in Latin America could see an increase of up to 10 percent in 2021, according to top tier regional executives from some of the largest international vehicle providers in the world.

In late November, Fleet Latam had a chance to speak with Kent Bjertrup (Latam regional director) at ALD Automotive, Ricardo de Bolle (Global business development director, Latam region) at Arval, and Regina Granados (Mexico CEO) at Leaseplan. They are pictured above, from left-to-right.

Despite the health and correlative economic crisis many countries in the region are facing today, Mr. Bjertrup highlighted the growth ALD Automotive is seeing in Colombia.

In 2020, “Colombia has been performing extremely well. During these difficult times, we have shown our flexibility and adaptability to this new reality and are recognized by the market as a benchmark. Considering Latin America as a whole, we are expecting growth of 7-10 percent year-over-year in 2021," said Mr. Bjertrup.

Arval is also seeing growth in Colombia, in addition to Brazil where it has its largest footprint. While Brazil is mainly due to the stability of the company’s existing client portfolio combined with proactive actions and support given to clients during the COVID-19 crisis, growth in Colombia is attributed to its new office.

Challenging year

“We opened a new branch in Colombia and, despite sanitary drawbacks and local competition, it looks like a very promising market with good feedback from our international clients,” said Mr. de Bolle, explaining that 2021 growth in terms of full-service leasing in Latin America is expected at 10 percent.

As for Leaseplan, most of its growth in the challenging year of 2020 has been seen in Mexico. "We are helping our clients adapt their fleet program by maximizing service and savings and offering an array of solutions that are adaptable to their needs," said Ms. Granados who also forecasts year-over-year growth in Latin America next year.

When it comes to full-service leasing, remember that asset demobilization is one of the most evident of benefits. It allows companies to quickly raise funds to invest in their core product without any major change for their drivers and operation, added Mr. Bjertrup.

The last thing anyone needs is unnecessary cost and leasing vehicles will provide you with safe operations, no up-front costs, and no financial risk, said Mr. de Bolle, adding that some mobility trends are becoming less popular today - notably carsharing and public transport – and this works in favor of full-service leasing.

Crisis means opportunity

Crisis means change opportunity, and a chance to evolve and become stronger than the past. Redistributing financial resources and cost savings are key and this can be done through a TCO (Total Cost of Ownership) model which provides a well-rounded vision of the fleet costs and identifies areas for improvement, according to Ms. Granados.

By reducing the risk of dealing with vehicle depreciation, maintenance cost and other factors, an efficient lease program allows companies to avoid hidden cost, maximize investment, reduce tax burden and gain more advantages, the executive added.

As you can see, full-service leasing could be a viable option to consider for your fleet operations, especially with the 2020 challenges which will likely continue in 2021. With that said, study your fleet profile, know the options available, and make the appropriate decisions to achieve better efficiency as we dive into the new year.

For a more well-rounded outlook of the footprint of leasing companies in Latin Americ and to learn more about how leasing can be the right choice during a crisis, read the 7th edition of the Fleet LatAm Institute’s Expert Insights, to be published the first week of December.

Image: Kent Bjertrup, Ricardo de Bolle, Regina Granados (source: Global Fleet)

Authored by: Daniel Bland