Latin America 2023 Outlook: How is Fleet and Mobility evolving?

Although the transition to electric vehicles (EV) in 2022 moved a bit slower in Latin America compared to many other parts of the world, sustainable fleet and mobility solutions continue to evolve as innovative ideas are certainly emerging in the region.

By Daniel Bland, Editor of the Americas, Global Fleet (pictured)

In this snapshot on what’s to come, let’s take a look at what is expected in 2023 throughout the 30+ country region.

EV factories around the corner

There are quite a few new EV factories on the horizon and I am seeing that much of this transition is being pushed by Chinese corporations in South America.

Regardless, we can't overlook that US-based Bravo Motor Company is carrying out a 25 billion-real (US$4.7bn) investment plan in the southeastern Brazilian state of Minas Gerais to produce EVs as well as their batteries and components.

Located in the city of Nova Lima in the metropolitan region of state capital Belo Horizonte, production of nearly 23,000 EVs is expected in 2024 with capacity increasing per year thereafter. The complex also expects to be producing 43,750 lithium battery kits per year.

As for the Chinese brands, automaker Great Wall Motors (GWM) is investing 10 billion reais in vehicle production investments in the Brazilian state of Sao Paulo. To be invested between 2022-2032, some 100,000 vehicles per year should be produced in 2023 at a factory previously owned by Mercedes Benz.
 
Located in the city of Iracemápolis, the plant will mainly focus on electrified vehicles (full-electric and hybrids) offering new technologies such as artificial intelligence (AI) and advanced driver-assistance systems (ADAS).

Meanwhile, Chinese automaker Chery is planning to produce battery electric vehicles (BEV) at a new automobile plant in Argentina. Starting with a production target of 50,000 units annually, the facility is reported to be in the Santa Fe province.

And up north, Chinese EV battery giant Contemporary Amperex Technology Co. Ltd. (CATL) could be building a US$5bn gigafactory in Mexico soon. As part of the company’s expansion plan to increase its current production capacity of 145 GWh to 579 GWh by 2026, it intends to build the new facility in North America, either the Unites States or Mexico.

Ever-evolving market

In 2022, Brazil’s largest leasing and car rental agency Localiza acquired the asset majority of its competitor Unidas and officially became known as Localiza&Co, now with more than half a million vehicles in its portfolio. In 2023, It will be zeroing in on the corporate vehicle rental market with a special focus on the trucking industry. 

The company is trailed by local competitor Movida with some 192,000 vehicles, followed by multinationals ALD Automotive and Arval and local players Ouro Verde and LM Frotas. Others to note in Latin America are Element Fleet Management, LeasePlan, and Ariza in Mexico.

Moreover, innovation is what pushes evolution and Latin America is certainly home to several heavy hitters when it comes to fleet and mobility startups. Among those to keep an eye on are Mexico-based Kavak and Brazil-based 99.

While Kavak is an online used car financing marketplace boasted as the first Mexican “unicorn” (valued at US$8.7 billion in early 2022), ride-hail company 99 connects passengers with private drivers and taxi drivers. 

In 2018, the latter sold 99% of its stock to China ride-hailing company Didi Chuxing for US$900 million. 99 (now known as Didi in Mexico) was valued at US$1 billion at the time.

Overcoming challenges with technology

In Latin America, besides political instabilities in some countries, bad road conditions and economic disparities are those that can result in fleet operational challenges associated with important factors such as fleet driver safety and security. 

As such, fleet managers need to reduce accidents as well as theft (vehicle and cargo) as much as possible, both of which can take a heavy toll on your total cost of ownership (TCO). 

Besides educating your drivers on proper behavior by implementing driver courses and training, one way to do this is to implement technology in your fleet, most common nowadays being telematics. Among the technology suppliers in the region are Geotab, GolFleet, Ituran, Lytx, Mix Telematics, Webfleet Solutions, and more. 

On the bright side

Despite the challenges, I see Latin America is a vibrant region filled with creative minds working to grow and mature the fleet management industry. Fine tune your networking skills and make the right connections so that you can take advantage of the opportunities. Last but not least, remember that networking is as key in Latin America as it is in other parts of the world, if not more.
 
For key learnings and the sharing of best practices with key executives throughout Latin America, join the Fleet LatAm Business Networking Group (BNG). See takeaways of the last BNG meeting here.

Authored by: Daniel Bland