Automotive and Car Fleet Sales Market in Chile
Vehicles are one of Chile’s largest imports. The country has no domestic production so brings in around 90 different brands from 27 countries, including Korea, China and Japan. Fleets consist primarily of LCVs and pickups due to the Andean nation’s industrial heritage.
Rise of the middle class in Chile
The middle class is growing fast in Chile and this is having strong bearing on new car sales. The Chilean automotive market enjoyed a mini boom at the beginning of 2017 with total vehicles sales up by 13.2% (7.3% in April alone). It performed better than expected and beat the rate of economic recovery. Chevrolet, Hyundai and Kia topped the charts in terms of sales (with sales increases of 15.2%, 13.5% and 7.8% respectively). Nissan enjoyed the biggest increase (over 20%) but only managed fourth place in the league tables.
LCVs (light commercial vehicles) and pickups comprise over a quarter of total sales to corporate customers and these are bought mainly by mining, logistics and utility companies.
Changes affecting fleet leasing in Chile
The OL (operating lease) has been popular in Chile historically because it makes the acquisition and operation of vehicles less expensive. However, the fact that most vehicles are imported (using over 15 different currencies) makes them expensive overall. OL suppliers used to have their own service structure but this is changing. The market is open and there are no barriers to importation so fleet sales in Chile are supported now by dealers. In the past few years, two important developments have effected a change in the industry: 1) the advent of multi-brand dealers and 2) the development of products and services specifically aimed at fleets. OL providers no longer need their own structure or service facilities, they can get this through dealers.
FSL (full service leasing) is well-developed in Chile and popular in the mining industry where the full cost of operating commercial vehicles is tax deductible. Despite there being no tax incentives for cars, fleet customers are beginning to recognise the advantages of FSL for benefit cars as well. It is still in early development but is showing signs of growth.
The economy is undoubtedly growing in Chile and this is fuelling new practices, services and products aimed at the fleet sector. Fleet customers are also becoming more sophisticated, professional and open to the new international standards being applied by specialist companies such as ALD and Arval Relsa.